Microsoft has confirmed that Activision will develop the next mainline Halo game amidst a sweeping restructure of Xbox studios. The company announced 268 layoffs primarily affecting Halo Studios, bringing its corporate-wide downsizing to roughly three-quarters of completion.
Layoffs Hit Halo Studios and Xbox Core Teams
Microsoft’s ongoing gaming division reset announced 268 layoffs touching Halo Studios, other first-party teams, and central management functions. The cuts follow a massive downsizing wave initiated in July under new Xbox boss Asha Sharma, which initially eliminated 1,600 jobs as part of a planned 3,600 overall reduction.
Xbox Chief Content Officer Matt Booty outlined the scale of the restructuring in a blog post, noting that the actions completed since July, inclusive of the studio divestitures, bring us roughly three-quarters of the way through previously announced restructuring
. Booty added: I am deeply grateful for what our colleagues have built, and I know how difficult today will be for those leaving and the teams around them.
Activision Takes Over Franchise Development
With Halo Studios significantly reduced, Microsoft handed development of future games over to Call of Duty publisher Activision. According to Xbox leadership, Activision will develop the next Halo title utilizing a dedicated, purpose-built team operating separately from ongoing Call of Duty operations. A small contingent at Halo Studios will remain active to support the community and existing games in-market.
Rob Kostich, president of Activision, issued a statement welcoming the transition: We’re thrilled to welcome Halo, Rare, and World’s Edge to Activision. It’s an honor and a responsibility that we do not take lightly. These teams and their games have inspired fans around the world for decades.
Kostich further outlined the publisher’s mandate for the franchise: For Halo, our goal is clear: make the greatest Halo game ever, worthy of its universe and legacy, while staying true to what made players love it in the first place.
Uncertainty Surrounds Ninja Theory and Studio Realignments
While Activision absorbs Halo, Rare, and Age of Empires developer World’s Edge, other parts of the Xbox portfolio face severe turbulence. Microsoft confirmed that attempts to find a buyer for Bafta-winning Hellblade developer Ninja Theory failed after two separate agreements fell through. The studio is now entering employee consultations regarding a potential closure, casting doubt on the future of its ongoing projects.
Other studios have seen internal consolidation. Forza Motorsport developer Turn 10 is merging with Forza Horizon and Fable developer Playground, and Candy Crush developer King has absorbed Microsoft Casual Games. Meanwhile, industry observers have noted the profound gravity of these shifts. Jez Corden of Windows Central characterized the shift as a dramatic move
, while gaming analyst Christopher Dring observed that it raised questions over whether it could help revive what was once Xbox’s crown jewel
.
Looking Ahead for Microsoft’s Gaming Strategy
The transition of Halo to Activision marks a shift for a franchise that Microsoft acquired when it purchased original developer Bungie in 2000. Following Bungie’s departure in 2007, Microsoft established 343 Industries—later rebranded as Halo Studios in 2024—to helm the series through entries like Halo 4, Halo 5: Guardians, and the troubled launch of Halo Infinite.
Neither Microsoft nor Activision has specified a release date for the next Halo installment, nor has it been confirmed whether Activision will attempt to reboot the series or integrate it into an annual release cadence. As the final quarter of the announced corporate restructuring gets underway, the immediate future of Xbox’s flagship intellectual property now rests under new creative management.
