Xbox has Linked Rare to Activision and Obsidian to Bethesda
Xbox has taken another step in its ongoing restructuring process throughout 2026. Microsoft has restructured some first-party studios with the aim of working with fewer business units and bringing closely related teams under one umbrella. In an official statement by Matt Booty, it was confirmed that two major developers have been moved to different companies, while it was specifically stated that the development of existing projects will continue.
Xbox Changes the Management Structure of Rare and Obsidian
Under the new organization, Rare will now operate under the management of Activision. Activision’s responsibility now includes World’s Edge. The company will also manage the development of the new Halo game, but this project will be handled by a newly created team separate from the Call of Duty teams. A smaller team at Halo Studios will continue to support existing games and the community.
At Obsidian Entertainment, management is passing to Bethesda. The studio will continue working on its current projects without canceling them and will continue its support for titles like Grounded. It was also announced that the new Fallout project, a collaboration between Obsidian and Bethesda Game Studios, will continue development under this new structure. Currently, there is no information indicating any planned cuts to active projects.
Matt Booty explains that the main goal of the change is to create fewer independent business units within Xbox, bring together already closely working teams, and utilize publishing expertise more efficiently. Therefore, Rare and Obsidian are not closing or being completely merged with other studios; they are being placed under the management of Activision and Bethesda.
These decisions are part of the new Xbox cuts announced on the same day, which resulted in 268 job losses. Microsoft had previously stated that approximately three-quarters of the restructuring was complete. While the new positions of Rare and Obsidian are now clear, it is not yet known which other studios will be affected by similar changes in the remaining period.
