Microsoft Sells Toys for Bob Studio, Eyeing Future Partnerships Amid Gaming Industry Overhaul

Microsoft Corp MSFT is taking a significant step by divesting the Toys for Bob video-game studio two decades after its Activision subsidiary scooped the studio. 

Toys for Bob, known for developing popular titles such as Skylanders and Crash Bandicoot N. Sane Trilogy, announced through a blog post by studio heads Paul Yan and Avery Lodato that it would be transitioning to operate as an independent studio. 

They also expressed an interest in exploring a potential partnership with Microsoft, although the financial details of the divestiture remain undisclosed, Bloomberg reports.

The decision is portrayed as an opportunity for Toys for Bob to embrace its origins as a “small and nimble studio,” a sentiment echoed by the studio’s leaders. Activision has publicly supported this move.

Founded in 1989, Toys for Bob has achieved notable success, particularly with the Skylanders franchise, which innovatively combined collectible figures with video game play. 

The studio has recently contributed to developing the Call of Duty franchise under Activision’s banner.

This divestiture occurs in the context of Microsoft’s $69 billion acquisition of Activision in October, marking the largest acquisition in the video game industry to date. 

The industry itself is currently experiencing a period of consolidation, highlighted by job cuts and the cancellation of games. 

Earlier in January, Microsoft announced the elimination of 1,900 positions within its gaming divisions, impacting numerous employees at Toys for Bob. 

Electronic Arts Inc EA announced a significant workforce reduction, planning to lay off 5% of its employees, around 670 people, as part of a broader initiative to streamline operations and cut back on office space and certain game developments. 

Similarly, Sony Group Corp’s SONY PlayStation division and other major players like Microsoft and Tencent Holding Ltd’s TCEHY Riot Games have also undertaken substantial layoffs, signaling a widespread industry shift towards consolidation and strategic refocusing.

SPDR Select Sector Fund – Technology XLK and Fidelity MSCI Information Technology Index ETF FTEC can help investors gain exposure to Microsoft. The ETFs have gained 10% year-to-date.

Price Action: MSFT shares are trading lower by 0.44% at $411.80 premarket on the last check Friday. 

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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