Xbox Hands Halo Franchise to Activision After 268 Layoffs at Halo Studios

Xbox has handed the future of Halo to Activision, marking a significant shift in the franchise's direction. The next mainline Halo title will be developed by a dedicated team at Activision, separate from its Call of Duty operations, Xbox CCO Matt Booty announced.

The move follows 268 job eliminations at Halo Studios, the rebranded successor to 343 Industries. Booty stated that "a small team at Halo Studios will continue supporting the Halo community and games in-market," focusing primarily on bug fixes and critical issues for Halo Infinite and Halo: Campaign Evolved. Infinite already received its final content update, and Campaign Evolved will receive no new DLC or features.

Activision president Rob Kostiche said the goal is to make "the greatest Halo game ever" while catering to everything fans love about the franchise. The project will reportedly be a "full-feature, mainline installment" with multiplayer components. Booty described the team as "led by a new, purpose-built team," suggesting potential involvement from other studios given that individual Call of Duty titles typically involve multiple developers.

The decision reflects Xbox's stated strategy to accelerate new entries for major franchises. In June, reports indicated Xbox leadership wanted to "move faster" on creating new games for Halo, Fallout, and The Elder Scrolls. This reorganisation has consolidated multiple studios under fewer publishers, with World's Edge and Rare now under Activision's purview, and World's Edge itself cut in half as part of broader layoffs.

The shift also marks a broader consolidation at Xbox. Turn 10 and Playground Games have been consolidated into a single studio, with Turn 10 functioning as a support operation following last year's layoffs. Hellblade developer Ninja Theory faces a "proposed closure" after prior agreements fell through, though Xbox says other paths forward are being explored.

Halo Studios and 343 Industries have faced consistent criticism over the past five years. Campaign Evolved, released as a remake rather than a full-priced new entry, received mixed player reception despite critical acclaim. The decision to outsource future development comes as Xbox prioritises product output and console exclusives, with leadership stating it wants to establish a reliable pipeline for future releases, particularly for Project Helix.

The consolidation has extended to personnel decisions. Gears of War: E-Day's story director and Halo Studios' cinematic director Josh Daniels were among those laid off despite recent promotions. Industry observers note the pattern raises questions about job security and talent retention at a time when Xbox is demanding faster development cycles on high-profile projects.