The aftereffects of the July 2026 XBOX layoffs continue, as both Rare and Obsidian Entertainment are the latest to be hit by corporate restructuring, as they have moved under Activision and Bethesda, respectively.
During the early part of September 22, a report surfaced claiming that XBOX would lay off ‘Hundreds’ and consolidate multiple studios during that week. Those rumors were true, and ‘that week’ turned into that very day, with XBOX announcing that Rare and Obsidian had been moved under Bethesda.
XBOX Restructures Rare & Obsidian Entertainment
In an official XBOX Wire post from CCO Matt Booty, we learned of the latest developments to two of XBOX’s biggest developers:
“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.
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. Activision will also 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. A small team at Halo Studios will continue supporting the Halo community and games in-market.”
Both studios are safe, but they have been individually consolidated under Activision and Bethesda. This shouldn’t change active development on any current games, like Grounded for Obsidian, or upcoming projects, like Fallout, with potential extra firepower being added to games in development.
- More Insider Gaming: Xbox’s Matt Booty’s Memo To Staff On Latest Layoffs
It comes as part of new XBOX moves, which have seen the company announce more of the original July XBOX layoffs, impacting a further 268 employees.
Furthermore, Activision is developing the next Halo game, and XBOX was close to a Ninja Theory deal, but it fell through.
What do you make of XBOX’s recent decisions? Share your thoughts in the official Insider Gaming Discord Server.
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Andy is Insider Gaming's Senior Evergreen Editor and has been in the games journalism sphere in one way or another for over 7 years. His video game taste is as…
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