Microsoft (MSFT) stock slipped 1.23% on Tuesday after the tech giant announced more changes coming to Xbox. In a letter to employees, Xbox Executive Vice President and Chief Content Officer Matt Booty outlined more parts of the video game company’s reset.
Here are the next steps in Xbox’s reset plan.
- Activision will take on more work across World’s Edge and Rare. It will also develop the next Halo title through a new, purpose-built team separate from Call of Duty’s ongoing development and plans. A small team at Halo Studios will keep supporting the Halo community and games already on the market.
- Bethesda will take on more work by bringing Obsidian under its remit. Obsidian will keep working on its current projects, including Grounded, along with the new Fallout project being made with Bethesda Game Studios.
- King will expand its remit to include Microsoft Casual Games. The move brings together two global leaders in casual game design and live operations.
- Playground and Turn 10 will merge into one studio focused on the Forza and Fable franchises. The two studios have worked as creative and franchise partners for more than a decade, and these changes will now bring their work under one team.
Layoffs Hit Xbox Studios
In addition to Xbox’s development studios taking up different duties, the company also announced layoffs. Halo Studios, other first-party studios, and the XGS management and central functions layer will experience 268 layoffs. This explains why Halo development is being moved to Activision. These also build on other Xbox layoffs announced earlier this year.
Xbox Completes Studio Divestitures
Compulsion and Double Fine returned to their own management in August, while Undead Labs also recently completed its split from Xbox. Ninja Theory has failed to find a buyer and plans to close the studio are underway. Consultation with Arkane is also still in the works and is expected to continue through the end of 2026.
Is Microsoft Stock a Buy, Sell, or Hold?
Turning to Wall Street, the analysts’ consensus rating for Microsoft is Strong Buy, based on 33 Buy and two Hold ratings over the past three months. With that comes an average MSFT stock price target of $571.72, representing a potential 15.35% upside for the shares. (See MSFT Stock Forecast)
