Microsoft Gaming Sees Dual Exit of Xbox Game Studios Leaders Amid Restructuring

Microsoft Gaming announced that Craig Duncan, head of Xbox Game Studios, and Louise O’Connor, the division’s chief of staff, will leave the company. The departures come after Duncan’s promotion to the role in October 2024 and O’Connor’s appointment in 2025. Both executives had long histories with Rare, Duncan having led the studio for nearly 14 years and O’Connor having joined Rare in 1999.

Duncan’s exit follows a broader reorganization of Xbox that began after the company’s 2023 acquisition of Activision Blizzard. The reorg was linked to a wave of layoffs that cut about 1,900 gaming‑related jobs earlier in 2024. Duncan had succeeded Alan Hartman as head of Xbox Game Studios, a position that oversees a portfolio that includes Halo, Forza, Fable, Gears, Obsidian, Ninja Theory, Double Fine, and several other first‑party studios.

With Duncan and O’Connor gone, all Xbox Game Studios teams now report directly to Matt Booty, who became Chief Content Officer in early 2026 following a restructuring that elevated Asha Sharma to chief executive officer of the Xbox division. Booty’s new role consolidates oversight of the studios while the division continues to evaluate potential closures and layoffs.

The dual departure is the third leadership change at the top of Xbox Game Studios in roughly two years. It follows the exit of former head Alan Hartman and the earlier departure of Phil Spencer, who retired as head of Microsoft Gaming in February 2026. The pattern suggests a deliberate shift toward a leaner content organization, with Sharma’s mandate reportedly focused on tightening studio output and profitability.

Microsoft’s internal communications indicate that the company is preparing significant layoffs and budget cuts that will take effect after the fiscal year end on June 30, 2026. The cuts are expected to affect more than 9,000 employees across the gaming division, including studios that have already entered survival negotiations, such as Double Fine, Ninja Theory, and Compulsion.

The impact on active projects remains unclear. Duncan’s oversight had encompassed the development of the 2027 Fable reboot, the next Halo campaign, Gears of War titles from The Coalition, ongoing support for Avowed, and pipeline work at studios like inXile and Undead Labs. The absence of a named successor raises questions about continuity for these franchises.

Microsoft has not announced a replacement for Duncan or clarified whether Booty will absorb the full scope of the role. A successor appointment before the June 30 layoffs would signal a commitment to maintaining the current studio structure; a lack of appointment would suggest that Booty’s consolidated content role will become permanent.

Industry observers note that the simultaneous loss of Duncan and O’Connor, both of whom brought extensive live‑service and UK studio management experience, coincides with a period of heightened uncertainty. The departures occur just before the expected layoffs, implying that the executives overseeing studios under evaluation may no longer be aligned with the new strategic direction.

The broader context includes Microsoft’s ongoing efforts to streamline its gaming portfolio after the Activision Blizzard acquisition. The company has announced the cancellation of projects such as Everwild and Sea of Thieves, and has been exploring the sale of certain studios. The restructuring also coincides with the launch of Project Helix, Microsoft’s next‑generation Xbox console, and the expansion of its Game Pass subscription service.

In summary, the exit of Craig Duncan and Louise O’Connor marks a significant shift in Xbox Game Studios’ leadership during a period of corporate restructuring and planned workforce reductions. The division’s future direction will depend on whether Microsoft appoints a new head of Xbox Game Studios or consolidates the role under Matt Booty’s content oversight. The outcome will influence the trajectory of key franchises and the stability of the studios that compose Microsoft’s first‑party portfolio.