Microsoft Game Studios' Rare team is to restructure, with the possibility of a number of redundancies at the Viva Pinata studio.
As part of Microsoft's wider restructuring announced last month, the company plans to shift focus and embrace new business models designed to speed up and simplify the games development process.
"As the entire industry struggles to address the increasing scale and cost of development, we too have felt a need to restructure our current approach so we can speed development and better manage the scale required to create high quality games," commented Mark Betteridge, studio manager.
"With four projects recently underway, now is the right time to make this change. Throughout its history, Rare has demonstrated a willingness to embrace new approaches and commitment to delivering game-changing experiences to our customers.
"This announcement is no different and builds on that tradition as we work with MGS to make interactive entertainment as culturally relevant in people’s lives as books, movies and television are today," he added.
Rare has drawn up three key areas where it intends to focus its developments going forward.
As an internal studio, the team will continue to focus on expanding the user base of the Xbox 360, a process it has already started with the release of distinctive offerings such as Viva Pinata and Banjo Kazooie: Nuts & Bolts.
The studio will also help grow the Xbox Live experience, following its success in designing the avatars used for NXE.
But it hasn't stepped away from the blockbusters either, as the team promises to "continue delivering AAA gaming experiences that excite both our current and future customers."
Rare said that it hopes its restructuring and adoption of new business practices can influence the wider games industry, but also admitted some team members may lose their positions as a result.
"In order to achieve these goals, the company is reviewing the current composition of its development teams and there is the possibility that a small number of current positions could be lost as a result of these changes."