Xbox layoffs and studio restructuring trigger widespread concern among gaming communities

Xbox has undergone significant upheaval this week, with a second wave of layoffs rippling through multiple studios and a major restructuring that reallocates studio management away from Xbox directly.

Ninja Theory, the developer behind Hellblade, faces impending closure. The news has struck particularly hard across the Hellblade community, with the subreddit marking the announcement as "devastating". Players expressed frustration at the timing, noting that Ninja Theory showcased Senua at an Xbox reveal just three months prior. "The whiplash is what really frustrates me," one post read. "Three months ago, they were on stage at the Xbox reveal for Senua. What's the point of showcasing a brand-new game if you're going to shut down the studio who made it?" Some observers speculated Xbox may have highlighted the game to make Ninja Theory seem more appealing to potential buyers.

Beyond Ninja Theory, layoffs have substantially reduced other studios. Halo Studios has been all but dismantled, while World's Edge, the Age of Empires developer, has been halved in staff. The studio restructuring has reassigned management: Obsidian moved under Bethesda, while Rare, World's Edge, and Halo moved under Activision.

The shift to Activision management has generated anxiety across multiple communities. Sea of Thieves players expressed concern about potential aggressive monetization similar to Call of Duty's model. "I'm teetering between 'Oh God not CoD' and 'Could they really do worse?'" one commenter wrote. Others edited Titanic GIFs to express their concerns. However, some acknowledged the current state of the game, with one asking whether Activision could truly perform worse than Rare's recent management.

Obsidian's move to Bethesda has prompted questions about creative scope. Bethesda has promised that Obsidian's "creative identity and strengths" will be retained, but players worry whether the studio will focus solely on the new Fallout game announced earlier this year. Some expressed optimism about The Outer Worlds 2, noting that its Premium Edition included a DLC pass for two add-ons that have not yet released. Xbox stated that Obsidian "will continue with its current projects, including Grounded," which is in early access.

The Forza developer consolidation, merging Turn 10 and Playground Games, generated less discussion. Community members noted that Turn 10 appears to function minimally at present, with the merger likely positioning Playground Games to lead future development while Turn 10 provides support.

Age of Empires 2: Definitive Edition players expressed concern about ongoing support following World's Edge's substantial layoffs. One subreddit comment read: "RIP AOE2 1999-2026."

Ninja Theory has not publicly commented on the studio closure, nor have key figures there made statements. Rare similarly has not responded publicly to the restructuring, with no notable layoffs reported at the studio, suggesting ongoing work on unannounced projects.