Xbox Moves Rare Under Activision, Obsidian to Bethesda in Studio Restructuring

Xbox has restructured its studio organization, moving Rare under Activision and Obsidian Entertainment under Bethesda. The changes were announced on Xbox Wire by Chief Creative Officer Matt Booty as part of broader efforts to streamline operations.

"We are reorganizing our studios. The goal is to strengthen our franchises and games by operating fewer business units, aligning groups that already work closely together, and focusing our publishing expertise," Booty stated. "Bethesda will expand its remit to include Obsidian, which will continue its current projects, including Grounded, as well as the new Fallout project made in collaboration with Bethesda Game Studios. Activision will expand its remit to World's Edge, as well as Rare."

Obsidian will continue development on its current projects under Bethesda's oversight. The studio is working on Grounded and collaborating with Bethesda Game Studios on a new Fallout title.

Activision's expanded responsibilities now include World's Edge and Rare. Additionally, Activision will lead development of the next Halo title through a new, purpose-built team that operates separately from ongoing Call of Duty development. A small team at Halo Studios will remain to support the existing Halo community and games currently in market.

The restructuring follows additional layoffs announced in September 2026, which impacted 268 employees. These changes represent a continuation of organizational shifts that began with major layoffs in July 2026. According to Xbox, the consolidation should not disrupt active development on current games or upcoming projects, with the realignment potentially providing additional resources to titles in development.