Microsoft Gaming Reset: Workforce Cuts and Studio Consolidation
AI-generated image · US National Wire
CEO Asha Sharma's restructuring moves key franchises under Activision Blizzard as the company pivots toward a billion-user goal.
Microsoft is executing a broad reorganization of its gaming division, characterized by significant workforce reductions and the consolidation of its studio network, as first reported by The Verge. CEO Asha Sharma has outlined a "reset" involving approximately 3,200 total job cuts. This includes 1,600 employees laid off in July and another 1,600 planned over the following fiscal year, with 268 roles eliminated as part of the announcement across Halo Studios, other first-party developers, and the Xbox Game Studios management layer.
As part of this shift, Microsoft is migrating several key assets under the Activision Blizzard umbrella. The development of the Halo franchise is moving to a new, purpose-built team at Activision, while Halo Studios will remain primarily as a support entity. Additionally, World's Edge (Age of Empires) and Rare (Sea of Thieves) are moving to Activision. Other strategic shifts include moving Obsidian under Bethesda Game Studios to focus on Fallout, and transferring all casual games, such as Solitaire and Minesweeper, to King.
Further consolidation includes the merger of Turn 10 (Forza) and Playground (Fable) into a single entity. Meanwhile, Double Fine and Compulsion have been spun off as independent companies. The remaining Xbox Game Studios umbrella now consists of a small number of teams, including InXile and The Coalition.
Sharma stated the objective of these changes is to reach "more than a billion people each day," with a strategic focus on established hits like Candy Crush, Halo, and Minecraft. While Microsoft continues to develop "Project Helix" for its hardware business, the company is also reevaluating its investment in the Game Pass subscription service.