After Xbox revealed that a further 268 roles across Halo Studios, other first-party studios would be cut as part of Microsoft’s restructuring efforts, multiple studios have announced changes, either under the Xbox umbrella or away from it.
Undead Labs, the studio developing the upcoming State of Decay 3 has confirmed that they’re now going independent after more than ten years as an Xbox owned studio. The developer is still working on State of Decay 3 and the game will still be arriving on Xbox Game Pass on day one, despite the studio no longer being owned by Microsoft. The game will also still release on PS5, Xbox, and PC some time in 2027.
After announcing their new independent status on LinkedIn, Undead Labs revealed that they will also be facing jobs cuts, saying, “Unfortunately, today we are also saying goodbye to a significant number of our colleagues. It’s difficult to reach this moment knowing that not everyone who helped get us here gets to make the rest of the journey with us.”
As confirmed by creative director Adam Isgreen on Reset Era, World’s Edge, the developer behind Age of Empires has had almost half of it’s staff laid off in the recent cuts. In his post, Isgreen said, “FYI World’s Edge was not spared completely – just under half the studio was let go – myself included,” and “Been fun, y’all!”
Candy Crush developer King will now be responsible for Microsoft Casual Games, such as Solitaire and Mahjong. The studio has avoided layoffs and looks set to take on a more responsibility under Xbox CEO Asha Sharma.
The Coalition, the studio behind the upcoming Gears of War: E-Day will remain under the Xbox Games Studios umbrella. However, as reported by Insider Gaming, the studio has also faced layoffs since the latest round was announced on September 22, 2026.
After revealing that Activision will now be developing the next Halo title, “led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty,” Activision’s President, Rob Kostich, told staff in a memo they won’t simply put current Call of Duty studios on Halo.
“I want to be clear that there’s still a lot to work through on next steps. We’re not going to rush this or simply plug existing teams into these games for the sake of shipping. We’ll be thoughtful about what each franchise needs and will share more as those plans come together,” said Kostich.
Finally, Microsoft has confirmed that Ninja Theory will be closed down after failing to find a buyer for the studio. After the announcement on September 22, the studio’s future was uncertain, however, it now seems clear that the studio will be shuttered as the Xbox restructures continue.