The 2026 XBOX Games Showcase was undeniably packed with exciting game reveals from AAA studios and independent teams alike, but there was one particular reveal that I can’t stop thinking about. As soon as the large purple text and adorably odd bird-like creatures appeared on screen, I recognized the art style. Everybody’s favorite little purple dragon was back to face a new foe, albeit with a little more of a mature redesign that reflects some of the new gameplay mechanics.
Toys for Bob unveiled Spyro: A Realm Beyond in a flashy cinematic trailer, complete with a tease for our hero’s newest ability — goodbye gliding, hello flight. Spyro can be seen soaring through the air with his new skill: freely flying through the arches of a bridge and collecting orbs in the sky of the beautifully color-saturated world, where the danger of a dark and mysterious big bad lurks above the clouds.
The reveal for Spyro: A Realm Beyond has been nothing shy of successful. The cinematic reveal trailer on the Spyro The Dragon YouTube channel has amassed more than 16 million views in just two weeks. Add yet another million when you combine view counts across the XBOX, Nintendo, and PlayStation channels.
But the successful revival of Spyro almost didn’t happen. Toys for Bob had to return to its independent roots after being targeted for closure by Activision to give its beloved purple dragon his big-boy wings.
The path forged by Toys for Bob — avoiding closure and spinning out to become an independent studio that continues to work in partnership with Activision and XBOX to publish its next game — could prove to be the solution that just might save studios like Ninja Theory and Compulsion Games, which are rumored to be next on the chopping block under new XBOX CEO Asha Sharma’s “reset.”
A notable history that led to a radical plan
Few game studios make it to see their 35th anniversary. With the tumultuous state of the games industry today, that elite club seems even more elusive. But Toys for Bob, originally founded in 1989 and operating as a partnership between founders Paul Reiche III and Fred Ford until the pair incorporated the studio in 2002, has somehow managed to not just see the 35-year mark — it has surpassed that milestone and continues trucking along, creating mesmerizing and meaningful digital worlds for a dedicated fanbase.
However, the Toys for Bob story is one of resilience. In 1990, the studio changed the landscape for science fiction games with the release of Star Control, followed by the 1992 sequel Star Control II with Accolade, Inc. and Crystal Dynamics as its publisher. Toys for Bob continued its partnership with Crystal Dynamics until the early 2000s, when it faced a layoff following the release of Disney’s 102 Dalmatians: Puppies to the Rescue.
We were getting away from the types of games that we love to make and that we’re best known for doing.
Paul Yan, Toys for Bob Studio Head
The studio found a new publisher in Activision and was fully acquired by the publisher in 2005. Activision then merged Toys for Bob with Vivendi Games, which held the rights to the Spyro IP at the time, setting the studio up to launch the Skylanders series and pioneer the toys-to-life game genre. “We had a fantastic, successful partnership over that time,” Toys for Bob studio head Paul Yan said in a recent IGN interview. Toys for Bob’s time with Spyro didn’t end there, as they then released the Spyro Reignited Trilogy in 2018.
After the unbelievably successful launch of Call of Duty: Warzone in March 2020, however, things changed for the studio as Activision began to allocate all of its studio teams to the resource-hungry free-to-play battle royale. Toys for Bob took its place as part of the dozen-plus studio machine that was fueling Call of Duty in addition to providing support for Overwatch 2 and other Activision properties.
Check out some early explorations on how #Spyro might evolve to take on new challenges in #ARealmBeyond pic.twitter.com/jz2ttxzgttJune 16, 2026
“Toys for Bob stepped up to support those initiatives, and those teams, and those games. We’re very proud of the work that we did, but deep down inside, we knew it wasn’t the right fit. We were getting away from the types of games that we love to make and that we’re best known for doing,” said Yan.
Activision was then acquired by Microsoft in 2022. Despite statements by then Microsoft Gaming CEO Phil Spencer on the potential for studios to revive past IPs, Toys for Bob still found its studio offices closed down amid massive layoffs that affected 1900 jobs across Microsoft’s workforce in January of 2024. Just four months later, Toys for Bob successfully spun off from Activision and regained its independence.
How to save a game development studio the Toys for Bob way
Toys for Bob’s plan was unprecedented. Buy back its independence. Take back creative, financial, and organizational control. And preserve its tenured team. For the plan to succeed, it hinged on the past success of Spyro. The team pitched a new Spyro title, published by Activision and XBOX with plans to drop day one on XBOX Game Pass, to secure its future. Two years after going independent, the Spyro: A Realm Beyond trailer showing up during the XBOX Showcase feels like a step in the right direction for a radical plan at independence paying off.
The more things change, however, the more they stay the same. XBOX has a new CEO with fresh eyes for the future of the company, but rising hardware prices and ballooning development costs are cutting into the bottom line. We’re told a ‘hard reset’ is on the horizon. Microsoft-owned studios like Ninja Theory and Compulsion Games are the new sacrificial lambs sitting on the proverbial chopping block, despite a strong showing for Senua at the 2026 XBOX showcase and South of Midnight’s ongoing award-pick-up spree.
Studio closures are a scourge on the gaming industry. Studios are often formed from teams that come together organically to bring life to a creative vision, and then those studios are scooped up by publishers who promise financial security. Then, when the tides of a fickle industry shift, the studio is shuttered, and creative talent that was being fostered finds itself fractured between other studios, where the cycle starts again. That’s without taking into consideration the talent that simply leaves the games industry altogether.
Spyro: A Realm Beyond was more than just a game announcement. It felt like a victory lap for independent game development and a survival plan for how studios could keep things together even in the face of closure.
Should Asha Sharma consider taking any pages from Phil Spencer’s playbook as CEO, I hope it’s the one that saw fit to accept Toys for Bob’s independence plan so that we can continue to see studios in danger of closure have a chance to stand on their own and create what they love. When studios like Toys for Bob have the opportunity to return to their independent roots and keep creative teams together rather than just finding locks on the studio doors, consumers win.
With any luck, the radical plan that let Toys for Bob become an indie studio with creative control can serve as a roadmap for studios like Ninja Theory and Compulsion Games if the rumors of their impending closures turn true. If there's anything the games industry can use right now, it's radical plans for independence that pay off.
Join us on Reddit at r/WindowsCentral to share your insights and discuss our latest news, reviews, and more.
