The news came during Microsoft’s pre-E3 press conference.
While the new studio is already at work on a game, Microsoft declined to say what it was.
Gallagher joined Microsoft Studios executive leadership team in April. Prior to his joining Microsoft, he spent two years with Activision as senior vice president and a decade at Crystal Dynamics. His work at Crystal culminated in his work rebooting the studio’s 2013 “Tomb Raider” reboot, which focused more on survival and delivering a more grounded and mature story. Gallagher also worked at Rockstar, Sony, and THQ over the life of his career.
The new studio brings to nine the number of first-party development studios Microsoft owns under its Studios branch. In the United States, the company owns the “Halo”-focused 343 Industries, the Microsoft Casual Games Team, and “Forza”-focused Turn 10 Studios.
In Europe, Microsoft owns Lift London, “Minecraft” creator Mojang, Rare which most recently published piratical adventure game “Sea of Thieves,” and announced today, “Playground Games,” which focuses on the “Forza Horizon” series. Microsoft also has The Coalition, which is working on “Gears of War” titles in Canada.