Xbox has not had a good 2026. In early July, the company announced it would lay off 1,600 employees and divest from several of its acclaimed studios, including Double Fine, with more layoffs expected in the coming fiscal year. On Sept. 22, Microsoft finally announced that next wave of job cuts, affecting an additional 268 developers. The layoffs coincided with a major company-wide reorganization that will merge several studios, resulting in big changes like Halo being moved under Activision.