Microsoft has finally delivered more in-depth information about the Xbox overhaul coming soon.
Xbox Restructuring Plans: Bethesda and the ZeniMax Umbrella
Xbox has confirmed the details of its sweeping restructuring plan, according to Bloomberg's report which claiming that Microsoft's gaming division will cut approximately 3,200 jobs and divest five studios.
New Xbox CEO Asha Sharma outlined the company's reset in a letter to employees, emphasizing a focus on higher-priority projects, and confirmed that no publicly known games are being canceled as part of the changes.
The biggest shift is at ZeniMax, the parent company of Bethesda and several other studios, which is undergoing a significant overhaul. ZeniMax Development Studios is being restructured to reduce management layers and accelerate game production. The goal is fewer experimental, long-shot titles like "Starfield" and a renewed focus on major franchises.
Xbox confirmed that "Fallout," "The Elder Scrolls," "Doom," "Quake," and "Wolfenstein" are the franchises that will drive output from the Bethesda umbrella going forward.
ZeniMax's structure covers Bethesda Game Studios, ZeniMax Online Studios, id Software, MachineGames, and Arkane Lyon. All of these studios fall under the new reduced-management model.
Studios outside that umbrella, including Double Fine and Compulsion Games, are going independent, while Ninja Theory and Undead Labs have been sold, though "Senua's Saga: Hellblade III" and "State of Decay 3" both remain funded.
Xbox's Bethesda to Focus on 'Fallout,' 'The Elder Scrolls'
According to GameRant, Bethesda Game Studios remains fully committed to completing "The Elder Scrolls 6," which is its current top development priority. "Fallout 5" remains far out, largely because Bethesda is occupied with "TES6," but Xbox has not abandoned the IP.
Recent online speculation and separate reports have pointed to possible remakes of "Fallout 3" and "Fallout: New Vegas," which could fill the gap while the main sequel remains in early planning.
Obsidian Entertainment, the developer of "Fallout: New Vegas," was recently rumored to be on the chopping block, but that was quickly denied. A separate rumor claimed Obsidian was already developing a new "Fallout" game, which was also refuted.
"Fallout: New Vegas" director Josh Sawyer has since said that any decision to put Obsidian on a new "Fallout" title would come from above the studio level, signaling it is not an internal Obsidian initiative but rather a decision that would need to come from Xbox leadership directly.
Microsoft Xbox's Other Studio: What's Happening?
The future of Arkane Lyon is currently being reviewed in coordination with the French government. The studio has been working on "Marvel's Blade" for several years, but the project has reportedly gone over budget and faced internal delays, leaving its future uncertain.
French labor law complicates any direct layoffs at Arkane Lyon, which is why the French government is involved in determining the studio's next steps.
Outside of ZeniMax, other studios leaving the Xbox umbrella include Double Fine, which is known for "Psychonauts 2," and Compulsion Games, developer of "South of Midnight."
Those studios will be going independent rather than being sold or closed outright, which gives them a clearer path forward than studios that have been shut down entirely in past Xbox restructurings.
Sharma's letter confirmed that further investment will follow for the studios and IPs remaining within the Xbox family.
