Xbox is barely Xbox anymore

Xbox has become a shell of its former self — and things are only getting worse. As part of its planned cuts impacting around 3,200 workers, the company announced today more changes that will further dilute the brand. Studios are being consolidated, others are on the brink of being closed altogether, and Xbox’s most iconic franchise, Halo, is being moved to a new developer. The future of Xbox looks more uncertain than ever.

Today’s news includes “eliminating 268 roles across Halo Studios, other first-party studios, and the [Xbox Game Studios] management and central functions layer.” But there is also plenty of reorganization happening, particularly when it comes to Xbox subsidiary Activision Blizzard. Development of Halo is moving over to Activision, helmed by “a new, purpose-built team” that is separate from the Call of Duty teams. Halo Studios will continue to exist, for now, primarily as a support studio. Meanwhile, Sea of Thieves developer Rare and Age of Empires studio World’s Edge are both moving under the Activision umbrella.

Similarly, Obsidian is being moved out from Xbox Game Studios and under Bethesda Game Studios, where it will refocus on the Fallout franchise, and all of Microsoft’s casual games, like Minesweeper and Solitaire, are moving under Candy Crush developer King. Meanwhile Playground and Turn 10, the studios responsible for Fable and Forza, are merging into one.

This is all part of the Xbox “reset” outlined by new CEO Asha Sharma, which kicked off with 1,600 employees being laid off in July, with 1,600 more planned over the following fiscal year, leaving many employees in an awkward state of limbo. A pair of studios were also spun off from the company, with both Double Fine and Compulsion going independent. Today’s layoffs are part of that second wave that was previously announced.

The reason for all of the changes, according to Sharma, is to eventually become a company that reaches “more than a billion people each day,” a nearly impossible goal that will be especially challenging to pull off given all of the cuts. The plan is to focus on known hits like Minecraft, Halo, and Candy Crush, while eschewing everything else and reevaluating just how much the company is investing in its Game Pass subscription service.

“For Halo, our goal is clear: make the greatest Halo game ever, worthy of its universe and legacy, while staying true to what made players love it in the first place,” Activision president Rob Kostich said in a statement. “It is a bold ambition, one that this franchise deserves. We have already begun assembling a purpose-built team, unique in capability and talent, ready and excited to deliver this next chapter with the community.”

Some of today’s moves, like expanding King and focusing more on franchises like Halo and Fallout, fit into that framework. But they also yet again raise a question that has plagued Microsoft’s gaming division for the last few years: What even is Xbox?

Once upon a time it was clear: It was a console business that also developed and published exclusive games for the platform. But as Microsoft attempted to expand, particularly by spending billions of dollars to turn Game Pass into a Netflix for games, the brand was diluted. The console became increasingly unimportant, and as for exclusives, well, it’s hard to follow just what the plan is for those. Despite some superficial rebranding, the case for Xbox isn’t any clearer now.

Today’s changes make that even more pronounced. Xbox Game Studios was once a sprawling organization of game developers creating titles for Game Pass and the various Xbox consoles. But after waves of layoffs, closures, and spinoffs, there isn’t all that much left under the umbrella. Today it consists of just a handful of studios like Gears of War developer The Coalition and Wasteland studio InXile. And the fate of these teams feels increasingly precarious. What happens to The Coalition after Gears of War: E-Day launches next month? History suggests it won’t be anything good. After all, Halo Studios just released a well-received Combat Evolved remake in July, and now it has been reduced to a “small team” that “will continue supporting the Halo community and games in-market.”

Xbox still plans for a future in the hardware business through whatever “Project Helix” ends up being. But when it comes to games, Xbox is mostly just Activision Blizzard and Bethesda now. Almost all of its most notable new games are coming from these subsidiaries, all of which were acquired for billions of dollars, initially to boost Game Pass. Recently, these companies have announced far-off titles like Fallout 5 and StarCraft in an apparent attempt to show that everything is okay while the broader Xbox business is embroiled in chaos.

And now we have Activision making Halo games. It’s a further signal that Xbox is attempting to make its franchises as big as possible — Activision managed to do just that with the annual juggernaut that is Call of Duty — but also a sign that the traditional Xbox brand is less important than ever. And that’s something no amount of capital letters will change.