Xbox Undergoing 'Reverse Acquisition' as Microsoft Reorganizes Studios Under Bethesda and Activision

Microsoft is reshuffling its gaming operations by moving several Xbox studios and franchises under the umbrellas of Bethesda and Activision Blizzard, leading games industry analyst Joost van Dreunen to characterize the changes as a "reverse acquisition of Xbox."

Last week, Microsoft announced the next phase of planned job cuts across Xbox, totaling 268 positions this round as part of 3,200 redundancies planned throughout fiscal 2027. The restructuring includes major studio realignments: Playground Games and Turn 10 have been merged, Bethesda Game Studios is now overseeing Obsidian Entertainment, and Rare, World's Edge, and the Halo franchise have been placed under Activision Blizzard's management.

Van Dreunen, a professor at NYU Stern School of Business, wrote on Substack that folding Halo into Activision represents a significant shift. "Folding Halo, one of Xbox's prized IPs, into Activision, the firm it acquired in 2023, is surprising at best. At worst, it's evidence of how poorly Xbox was running its studios," van Dreunen stated.

He characterized the broader pattern as "a reverse acquisition in slow motion, where the publisher Microsoft paid $69 billion for turns out to be the division best equipped to run the studios Microsoft built itself." Van Dreunen compared the situation to Disney's 2006 acquisition of Pixar, noting that senior Pixar talent was deployed to fix Disney's animation division.

The analyst suggested that Microsoft's acquisition strategy may have been more focused on acquiring managerial talent than intellectual property. While moving Halo under Activision with a dedicated team represents a logical step, van Dreunen cautioned it offers no guarantee of success, citing Call of Duty Black Ops 6's sharp player drop-off after its launch spring period.