Official: XBOX to lay off 268 employees, and Ninja Theory faces potential closure

gameworldobserver.com ^ | September 22, 2026 | Published by admin

[Red Badger]

Microsoft Corporation has indeed announced new changes within its gaming division. Nearly three hundred employees will be affected by these layoffs.

According to a statement by XBOX Content Director Matt Booty, the layoffs will take place at Halo Studios and several other studios — the full list has not been disclosed. They will also affect the management tier of XBOX and the central office.

Layoffs are not the only changes Microsoft is implementing. Certain XBOX subsidiary studios are set for reorganization:

Obsidian will now become part of Bethesda; the Microsoft Casual Game division, which works on games like Minesweeper and

Solitaire Collection, will be incorporated into King;

Playground Games and Turn 10 Studios will merge into one studio; studios Rare and World’s Edge will work under the wing of Activision; moreover, Activision will spearhead the future development of the Halo franchise — a special team will be formed for this purpose. A small part of Halo Studios will continue supporting existing projects.

Booty added that Microsoft has yet to find a buyer for Ninja Theory — two deals have already fallen through to date. In light of this, the corporation has begun negotiations about closing Ninja Theory, though it hopes to avoid such an outcome.

The fate of Arkane Lyon remains uncertain. Consultations regarding its separation from Microsoft are expected to continue until the end of the year.

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TOPICS: Business/Economy; Computers/Internet; History; Military/Veterans
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[Red Badger]

Ping!....................

[Libloather]

AI will take over. Doanworryaboudit.

[Dr. Sivana]

I do not see the gaming division working into Microsoft’s long range plans if it is not a money-maker.

Sony and Nintendo have more skin in the game, and have an identity with a clear fanbase. MS is always going to be competing with PC based gaming platforms.

I have a college friend who worked on the XBOX team for a while. He told me it was horrible.

[Red Badger]

One word:

SPINOFF................

[Kleon]

Ninja Theory faces potential closure

Go woke, go broke.

[PAR35]

If due diligence has killed deals with two separate parties, there must be a situation where no number works.

[Red Badger]

My guess is there aren’t as many gamers as they thought and not enough to keep them in business............

[Dr. Sivana]

Microsoft has bailed on its consumer failures before.

Plays for Sure
Zune
Windows CE/Phones in general

[ConservativeMind]

No one can afford the graphics cards or memory for newer computers, so they aren’t selling as many games.

[wiseprince]

Purchasing of Bethesda, Activision and a bunch of other studios tell me they don’t have a proper mechanism in place to allocate capital. All the buybacks they could have funded instead of burning 100 billion should make investors more than a little annoyed.

[ClearCase_guy]

According to a statement by XBOX Content Director Matt Booty, the layoffs will take place at Halo Studios and several other studios

No one wants the Booty call.

[Hyman Roth]

Well played.

[Dr. Sivana]

Purchasing of Bethesda, Activision and a bunch of other studios tell me they don’t have a proper mechanism in place to allocate capital.

They might have done that ensure that desirable products are developed for xbox, or even prioritized. Microsoft is going to have internal conflict with subsidiaries like Activision that continue to develop for competing platforms. Also, video game companies, like the movies, have become accustomed to a handful of mega-tentpole games instead of releasing a lot of product for different audiences. One miss or change in a popular game type can be catastrophic.

[dayglored]

> No one wants the Booty call.

"Matt Booty"? Seriously?

But it's okay, that's just his "Gay Name". You know, for when he's out and about town.

[VTenigma]

AI is going to put a lot of game developers out of business. What once took teams of developers months if not years to do AI can do in less than a week.