// KOTAKU — GAMING
Xbox’s Restructuring Is A ‘Reverse Acquisition In Slow Motion,’ Analysts Say
Yesterday, Xbox announced the next stage in its ongoing major restructuring, consolidating several studios and laying off another 268 as it works its way toward a planned total of around 3200 job cuts in the space of a year. Halo has been handed off to Activision as Halo Studios shrinks to support size, Rare and Age of Empires developer World’s Edge are also under the Activision banner now, Obsidian is moving under Bethesda, Turn 10 and Playground are merging, and Ninja Theory is entering consultation.
Joost van Dreunen, NYU Stern professor and author of SuperJoost Playlist, is calling it “a reverse acquisition in slow motion.”
“The publishers Xbox spent a fortune acquiring are now absorbing the studios Xbox built,” he wrote yesterday.
I reached out to my usual cadre of analysts in the wake of this news to ask them what they make of this massive shake-up, and received back a series of emails full of deep concern, but little surprise.
Both head of market analysis at Alinea Analytics Rhys Elliot and Omdia senior analyst James McWhirter brought up what they saw as Xbox’s identity crisis, with Elliott noting that Xbox has swapped roles to become a publisher first and a platform second, and McWhirter seeing it more as Xbox feeling pulled in both directions.
“It still wants to be a console platform holder, yet its expanded remit as a multiplatform publisher has weakened its ability to compete with Sony and Nintendo on the same level,” McWhirter said. “Game Pass was meant to broaden the audience, but it instead diverted spend away from upfront purchases toward subscription revenue.
“Put simply, its first-party portfolio hasn’t reached the potential Xbox would like it to because of its many conflicting objectives.”
Even so, several of the analysts I spoke to saw some logic in some of the combinations, with both Elliott and Newzoo director of market intelligence Manu Rosier noting that a number of the smaller studios have been folded in with larger studios working in the same genre. “Activision leads shooters, Bethesda leads role-playing games, King leads casual, and Playground leads racing,” Rosier said. “One leadership per genre can plan releases across all its games. That can stop Microsoft titles from competing with each other for the same players and avoid gaps in the calendar.
“Newzoo data shows why: since January 2025, players of Obsidian’s Avowed and The Outer Worlds 2 were more than three times more likely than average to also play Bethesda’s Starfield or The Elder Scrolls IV: Oblivion Remastered. Yet Avowed and The Elder Scrolls IV: Oblivion Remastered launched just two months apart in 2025. Newzoo data shows PC and console playtime was flat in 2025. New games mostly take time away from existing ones. In a market this competitive, it makes sense to place fewer bets, each made by the most experienced team.
“Ubisoft and Electronic Arts made similar moves. Ubisoft regrouped its studios into five genre-based Creative Houses in January 2026, and Electronic Arts brought four studios, including Criterion and Motive, under a single Battlefield Studios banner in 2025.”