Skydance Merges Game Divisions, Gravity Well Cuts 40+

Oct 8, 2026

Skydance is combining Paramount Games Studio and Warner Bros. Games after completing its $111 billion acquisition of Warner Bros. Discovery, while Gravity Well confirms more than 40 layoffs after losing its funding GamesIndustry.bizGamesIndustry.bizGamesIndustry.biz. Xbox CEO Asha Sharma also tells staff the company has started to return to growth as Microsoft discusses its next-generation Project Helix plans EurogamerVGC.

Skydance Combines Paramount Games Studio and Warner Bros. Games

Paramount Games Studio and WB Games merge under Skydance following completion of $111bn acquisitionParamount and Warner Bros. Discovery operating under Skydance following completion of $111bn mergerGamesIndustry.bizGamesIndustry.biz

Paramount Games Studio and Warner Bros. Games are merging into one gaming division under Skydance, with Tony Driscoll overseeing the combined unit GamesIndustry.biz. The consolidation follows Paramount’s completed $111 billion acquisition of Warner Bros. Discovery GamesIndustry.biz.

The combined group brings Warner Bros. teams including Rocksteady and Avalanche under the same corporate umbrella as Paramount’s gaming operation This Week in Video Games. The franchises involved include Mortal Kombat and SpongeBob VGC.

Gravity Well Lays Off More Than 40 Developers After Losing Funding

Gravity Well lays off more than 40 developers after losing its fundingGravity Well Confirms “Over 40” Developers Laid Off, Debut Game Yet to be RevealedGamesIndustry.bizThis Week in Video Games

Gravity Well has laid off more than 40 developers after losing its funding, cutting the majority of the team at the independent studio founded by Respawn Entertainment alumni GamesIndustry.biz. The studio’s debut game has not been revealed This Week in Video Games.

Bit Reactor, meanwhile, has started bringing back more than half of the staff it furloughed ahead of Star Wars Zero Company’s launch Game Developer. The studio says the returning employees will provide continued support for the game IGN.

Xbox Says It Is Returning to Growth and Details Project Helix

"After an all-time low, we've started to return to growth" - Asha Sharma touts Xbox turnaround after drastic restructuring and many hundreds of layoffsXbox restates plans for next-gen Project Helix to be a "family of devices", stressing "many players will be on the go"EurogamerEurogamer

Sharma reportedly told Xbox staff that the company has started to return to growth after reaching an “all-time low,” following restructuring that resulted in more than 1,800 job losses EurogamerVGC. Microsoft describes next-generation Project Helix as a “family of devices,” and Sharma hints that the lineup could include a handheld EurogamerVGC.

Xbox also denies reports that it secured exclusive cloud-streaming rights for Grand Theft Auto VI Eurogamer. The denial counters claims that the game would stream exclusively through Xbox Cloud Gaming at launch Rock Paper Shotgun.

Ape Escape Revival Reportedly in Development at Evening Star

Rumor: Ape Escape revival in development at Evening StarNew Ape Escape Reportedly in Development at Sonic Mania TeamGematsuIGN

A new Ape Escape game is reportedly in development at Evening Star, the studio behind Sonic Mania and Penny’s Big Breakaway GematsuVGC. The reports identify the studio as the team working on Sony’s rumored revival of the PlayStation series IGN.

PS5 Adds a Dedicated Crunchyroll Anime Hub in Spring 2027

PS5 to Integrate Anime into Main Menu as Sony Tightens Ties with CrunchyrollCrunchyroll dedicated hub announced for PS5Push SquareGematsu

Sony Interactive Entertainment and Crunchyroll plan to add a dedicated anime hub to the PlayStation 5 main menu starting in Spring 2027 Push SquareGematsu. The hub is intended to make anime content easier for the PlayStation community to discover and explore Push Square.

End of Thursday's overview · 5 stories from 9 outlets

Previous overviewOct 7, 2026