Xbox Hands Development of Future Halo Games to Activision
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Post By
Emmie
- September 22, 2026
Microsoft’s gaming division is undergoing another major overhaul, cutting hundreds of jobs and shifting its flagship franchises as part of an ongoing company-wide reset.
The restructuring includes 268 newly announced layoffs across Halo Studios, central functions, and other first-party teams. The cuts follow a massive wave of 1,600 job losses initiated in July by Xbox CEO Asha Sharma, who previously noted that the gaming division had not been "healthy" despite the value of services like Game Pass. With nearly 1,900 roles eliminated so far, Xbox stated it is "roughly three-quarters of the way through" its total planned downsizing of 3,200 positions.
In one of the biggest strategic shifts in Xbox history, development of future Halo titles is being transferred to Call of Duty publisher Activision. A dedicated team separate from Call of Duty will handle the next flagship game, while a skeleton crew at Halo Studios will remain behind to support existing titles like Halo Infinite and Halo: Campaign Evolved.
Activision President Rob Kostich outlined the studio's ambition for the sci-fi shooter: "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." He added, "We have already begun assembling a purpose-built team, unique in capability and talent, ready and excited to deliver this next chapter with the community."
Beyond Halo, Activision is taking control of legendary UK developer Rare—creators of Sea of Thieves—as well as World’s Edge, the studio behind Age of Empires.
Meanwhile, British developer Ninja Theory is facing imminent closure after Xbox failed to secure a buyer. In an internal blog post, Xbox Chief Content Officer Matt Booty explained, "Unfortunately, two separate agreements for Ninja Theory fell through. We will now begin consultation with employees on a proposed closure while continuing to explore other paths forward." He added that "Consultation with Arkane remains underway and is expected to continue through the end of the year," whereas other studios like Undead Labs, Double Fine, and Compulsion Games have successfully transitioned out of Microsoft to regain independence or partner with new publishers.
The corporate reorganization reshuffles several other key studios:
- Bethesda will take Fallout: New Vegas developer Obsidian under its wing to collaborate on a new project in the Fallout universe.
- Playground Games and Turn 10 Studios will merge into a single entity focused on the Forza and Fable franchises.
- King will absorb Microsoft Casual Games, taking over classic titles like Solitaire and Minesweeper.
