Xbox reorganizes: Playground Games and Turn 10 Studios merged, 268 jobs cut

What happened

Microsoft has started a broader restructuring of its gaming division, with Xbox being reorganized again. Reporting also refers to changes around Activision and Bethesda, but the exact details have not been fully specified. What is clear is that this reorganization is not limited to a single studio or franchise, but is part of a wider reshuffle within Microsoft Gaming.

The most concrete change is the merger of Playground Games and Turn 10 Studios. According to the source, Xbox chief creative officer Matt Booty said the two studios have been creative and franchise partners for more than a decade, and that their work is now being formally brought under one team. That means two teams that have long worked on the same racing franchise are being brought closer together organizationally. The source does not say the studios are disappearing; it is a consolidation of development structures.

The source also mentions 268 eliminated Xbox positions as part of a previously announced second wave of layoffs. The piece does not distinguish between that broader cost-cutting round and any specific impact on the Forza studios. The provided information also explicitly says it is unclear whether the merger of Playground Games and Turn 10 Studios itself will lead to additional layoffs. Only the 268 redundant roles are confirmed.

Timeline

2001 — Turn 10 Studios is founded to develop racing games for Microsoft Game Studios.
2012 — Playground Games releases the first Forza Horizon.
Earlier this year — Microsoft announces a second wave of job cuts within Xbox.
2026-09-22 — Microsoft announces a new reorganization within Xbox and merges Playground Games and Turn 10 Studios into one development team.
2026-09-22 — Reporting says 268 Xbox positions are being cut as part of that second layoff round.
2026-09-22 — Matt Booty reportedly writes that the two studios have worked on the franchise together for more than ten years and that their work now falls under one team.
2026-09-22 — The same reporting refers to changes around Activision and Bethesda, but without detailed organizational specifics.

Background

Playground Games developed the first Forza Horizon in 2012 and, according to the source, has made every Forza Horizon game since. Turn 10 Studios was founded in 2001 to develop racing games for Microsoft Game Studios. The current reorganization therefore concerns two studios that have worked closely together on the same franchise for years and are now being brought even closer together administratively and creatively.

The provided information also mentions a new chapter in the Fable series that is said to be planned for next year. However, the title, platform, and release date are missing, so the only thing that can be confirmed is that the reporting mentions a Fable project or moment for next year. The source also includes a reference to a GameSpot video titled Fable - Release Date Reveal Trailer, but that title alone is not enough to confirm any additional details about the project.

The reorganization fits into a broader period of change within Microsoft Gaming, where Xbox, Activision, and Bethesda are mentioned in the same context. However, the available information does not specify which teams or studios at Activision and Bethesda are affected. As a result, the core of the news remains limited to two confirmed elements: the merger of Playground Games and Turn 10 Studios and the loss of 268 Xbox positions.