# Microsoft Xbox division restructuring and expansion

> Live situation record from CLSTR: https://clstr.news/situations/microsoft-xbox-division-restructuring-and-expansion
> Updated: 2026-09-24T03:33:58.000Z. Sources: 19. Developments: 2.

Microsoft has initiated a series of strategic shifts involving its gaming and entertainment assets. Initially, the company reportedly pitched a $300 million package to Hollywood studios and streaming services, including Netflix, Paramount, and Universal, to secure film and television adaptation rights for major franchises such as ‘Halo’, ‘Diablo’, ‘Warcraft’, and ‘Starcraft’. This move aimed to expand Microsoft’s presence in the audiovisual sector following its acquisitions of Activision Blizzard and Bethesda.

Subsequently, Microsoft began a major restructuring of its gaming division, resulting in 268 job cuts across Halo Studios, Xbox Game Studios management, and other internal teams. This reorganization involves shifting the development of the next mainline Halo title to a dedicated team within Activision, while Halo Studios transitions to a smaller support-focused role. Other studio movements include placing Rare and World’s Edge under Activision leadership, moving Obsidian Entertainment under Bethesda management, and merging Playground Games and Turn 10 Studios into a single unit. The company is also evaluating the potential closure of Ninja Theory and Arkane.

## Claims

- Activision will take over development of the next Halo title using a newly formed team. (corroborated by 8 sources)
- Microsoft is cutting 268 jobs across Halo Studios, internal teams, and Xbox Game Studios management. (corroborated by 5 sources)
- Rare and World’s Edge are being moved under Activision leadership. (corroborated by 5 sources)
- Microsoft is consulting employees regarding the potential closure of Ninja Theory following two failed sale attempts. (corroborated by 4 sources)
- Obsidian Entertainment is being moved under Bethesda management. (corroborated by 4 sources)
- Microsoft is holding consultations regarding the future of Arkane studio. (corroborated by 4 sources)
- Playground Games and Turn 10 Studios are being merged into a single team to focus on the Forza and Fable series. (corroborated by 3 sources)
- The current restructuring process is approximately 75 percent complete. (corroborated by 2 sources)

## Timeline

### 2026-09-24: Microsoft restructures Xbox division, moves Halo to Activision

Microsoft is restructuring its gaming division, cutting 268 jobs and moving Halo development to Activision. Other changes include studio mergers and potential closures for Ninja Theory and Arkane.

12 sources. https://clstr.news/cluster/microsoft-reshuffles-xbox-division-with-layoffs-and-studio-transfers

### 2026-08-31: Microsoft pitches $300 million Xbox franchise package to Hollywood

Microsoft is reportedly pitching a $300 million package to Hollywood and streaming services for the film and TV rights to over a dozen major Xbox franchises, including ‘Halo’ and ‘Diablo’.

7 sources. https://clstr.news/cluster/microsoft-pitches-300-million-xbox-ip-bundle-to-hollywood

---
Cite as: Microsoft Xbox division restructuring and expansion. CLSTR, https://clstr.news/situations/microsoft-xbox-division-restructuring-and-expansion