Key facts
- Obsidian Entertainment will continue work on a new Grounded game and a new Fallout project.
- Microsoft Casual Games will now report to Candy Crush studio King.
- Playground Games and Turn 10 are being merged into a single team.
- Microsoft is seeking a buyer for Ninja Theory and Arkane Studios.
- Microsoft has already divested Compulsion, Undead Labs, and Double Fine.
- Xbox is roughly three-quarters through its planned 3,200 layoffs.
Xbox is implementing a significant restructuring aimed at strengthening its franchises and streamlining operations. As part of this overhaul, Obsidian Entertainment, known for games like Fallout: New Vegas and Avowed, will be integrated into Bethesda. There, the studio will continue its work on a new Grounded game and embark on a new Fallout project in collaboration with Bethesda Game Studios.
In other internal shifts, Microsoft Casual Games, responsible for titles like Solitaire and Minesweeper, will now fall under the purview of King, the studio behind Candy Crush. Additionally, Playground Games, creators of Fable and Forza Horizon, and Turn 10, developers of Forza Motorsport, are being consolidated into a single development team.
Microsoft is also actively seeking a buyer for Ninja Theory, the studio behind Hellblade: Senua’s Sacrifice, and Arkane Studios, known for Dishonored and Prey. This follows previous divestitures of studios including Compulsion (We Happy Few), Undead Labs (State of Decay), and Double Fine (Psychonauts).
According to Microsoft, these organizational changes are intended to reduce the number of business units, align closely collaborating groups, and enhance publishing expertise. The company also aims to reduce management layers, which have been cited as a cause for slowed decision-making and blurred accountability. The ongoing layoffs, which began earlier this summer, are reportedly about three-quarters complete, with approximately 3,200 employees slated for termination.