Xbox's 'Reverse Acquisition'? Analyst Says Microsoft Is Being Taken Over

An analyst claims Xbox is undergoing a 'reverse acquisition' as Microsoft places key studios under Bethesda and Activision, following layoffs and a major reshuffle.

Ever feel like the gaming industry is playing a giant game of musical chairs? Well, Xbox just made a move that has one analyst calling it a "reverse acquisition." In plain English: Microsoft paid $69 billion for Activision Blizzard, and now it looks like Activision is the one running the show.

Last week, Microsoft announced the next wave of layoffs as part of its plan to cut 3,200 jobs across Xbox by FY27. The latest round hits 268 people, affecting studios like Halo Studios and The Coalition. But the bigger shock? A massive reshuffle at Xbox Game Studios. Playground Games and Turn 10 have been merged. Bethesda Game Studios now manages Obsidian Entertainment. And Rare, World's Edge, and the entire Halo franchise have been moved under Activision Blizzard.

That last bit is what caught the attention of Joost van Dreunen, a professor at NYU Stern and games industry analyst. In a Substack post, he described the changes as a "reverse acquisition of Xbox." He pointed out that folding Halo—one of Xbox's crown jewels—into Activision, the company Microsoft bought in 2023, is "surprising at best. At worst, it's evidence of how poorly Xbox was running its studios."

Van Dreunen doesn't think it's necessarily a bad move, though. He said bringing Halo under Activision, even with a dedicated team, is "a logical step. But it doesn't guarantee success." He pointed to Call of Duty: Black Ops 6, which had a huge launch but saw a sharp drop-off in players by spring. So even Activision's magic touch isn't a sure thing.

He compared the situation to Disney's 2006 purchase of Pixar, where Pixar's senior team took over Disney's struggling animation studio while Pixar was on a hot streak. "It's becoming evident that Microsoft's acquisitions were less about the IP and more about the managerial talent," van Dreunen said. In other words, Microsoft didn't just buy games—it bought the people who know how to run them.

Since acquiring Activision Blizzard King in late 2023, Microsoft has had annual layoffs. With studio closures and teams being shuffled under Bethesda, Activision Blizzard, and King, Xbox Game Studios is down to just a handful of studios. Even Double Fine boss Tim Schafer is baffled, saying, "People are making money, so I don't know why there's a big loss of jobs."

So, what do you think? Is Xbox being slowly taken over from within, or is this just a necessary shake-up? Will you be picking up the next Halo game knowing it's under Activision? Let us know in the comments!