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Microsoft restructures Xbox, moving franchises between publishers as layoffs likely fall short of 3,200
Microsoft's latest Xbox restructure is mostly a change of which publisher owns which franchise. The teams involved land in four different places, depending on whether a home was found for the games, the people, both or neither.
The Product Desk · Product desk
What happened
- Microsoft announced a further round of Xbox restructures affecting Ninja Theory, Obsidian, Turn 10 and Halo Studios, after saying last July it would reduce its gaming workforce by around 3,200 staffers.
- Halo Studios is being downsized into the franchise's production and administration arm with around 230 roles lost, and stewardship of Halo passes to an Activision studio Microsoft has not named.
- Two attempts to sell Ninja Theory fell through, so Microsoft has entered redundancy consultations with the UK government, and Windows Central's sources say a buyer for Hellblade is still being sought.
- Rare and Sea of Thieves move under Activision, World's Edge and Age of Empires follow them, and Obsidian and Grounded move under ZeniMax to work more closely with Bethesda Softworks on Fallout.
- Xbox Game Studios keeps Playground, which absorbs Turn 10, along with The Coalition, InXile and the publishing arm handling Hideo Kojima's PHYSINT.
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Why it matters
- decision Planning around a Microsoft franchise now starts with working out which publisher signs off on it, because Halo's stewardship moved to Activision while the production staff stayed where they were.
- cost Ninja Theory's staff pay for the two collapsed sales: a statutory UK consultation is running while Microsoft keeps shopping the studio, so their outcome depends on a buyer appearing during the process.
- constraint With around 230 roles booked against the Halo change, the rest of the July target depends on divestitures and internal transfers completing, and the Arkane and Ninja Theory processes have not closed.
- contradiction The 3,200 figure Microsoft gave in July and the smaller outcome Windows Central's sources describe do not match, so the public number is a poor guide to how many people actually leave.
Halo Studios is the only part of this with a number attached: around 230 roles [10]. Set against the roughly 3,200 gaming roles Microsoft said last July it wanted to remove, that is about 7 percent of the target, and it leaves around 2,970 to come from elsewhere [2][19][20]. Windows Central reports its sources expect the final figure to fall short of 3,200, because Microsoft is restructuring and moving employees into other departments as much as it can [3].
Microsoft's own word for the exercise, as reported, is "restructures" [1]. That covers two operations that behave differently. One removes people. The other changes which publisher a franchise sits under, and none of those moves alters a shipping game; they change which publisher the next one gets made for [9][13][14][15].
The teams named sort by whether the franchise found a new home and whether the people did. Obsidian, Rare and World's Edge got both, keeping their teams while changing publisher inside the company [13][14][15]. Double Fine and Compulsion got both by leaving, and Double Fine is now running a Kickstarter to fund its next title [4]. Undead Labs has a publisher that has not been identified [5], and talks about Arkane's future are unresolved [6]. Halo found a home, and most of its people were cut [9][11]. Ninja Theory found neither [7].
Windows Central reported that moving teams out from under the Microsoft umbrella also takes employees out of Microsoft's bureaucracy and corporate structure, potentially reducing overheads and costs [17]. The site's writer said Halo Studios' proximity to Microsoft HQ has long been a source of corporate inertia and cost bloating [18]. Both readings are the outlet's own.
The four groups are on different timetables. A team that only changed publisher finds out what the new owner wants at the next planning cycle. Halo Studios keeps the franchise's production and administration work while stewardship sits with Activision [9]. At Ninja Theory the consultation runs on a statutory timetable, and the buyer search for the studio and Hellblade is running alongside it [7][8].
What to watch
- Whether Microsoft names the Activision studio taking over Halo development, and whether it is one of the Call of Duty teams.
- The outcome of the UK redundancy consultation at Ninja Theory, and whether a third buyer emerges for the studio and Hellblade.
- A final headcount for the gaming reduction, which would show how much of the 3,200 was met by transfers and divestitures.