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Activision Will Develop the Next Halo as Microsoft Restructures Xbox
Microsoft is cutting 268 Xbox roles and reorganising major studios, with a new Activision team taking responsibility for the next Halo game.
Microsoft is pushing its Xbox restructuring deeper into its studio network, cutting 268 roles while moving responsibility for the next Halo game to Activision. The change is part of the Xbox “reset” announced earlier in 2026 and represents a major shift for a series that has been developed under Microsoft’s dedicated Halo teams for more than two decades.
In a message published by Xbox, chief content officer Matt Booty said the latest job reductions affect Halo Studios, other first-party studios, and Xbox Game Studios management and central functions. He added that actions completed since July, including studio divestitures, put Microsoft roughly three-quarters of the way through its previously announced restructuring.
Activision gets the next Halo
The headline change is that Activision will develop the next Halo title through a new, purpose-built team. Microsoft explicitly says that team will be separate from ongoing Call of Duty development and future Call of Duty plans. A smaller Halo Studios group will remain in place to support the Halo community and games already on the market.
That distinction matters because the move does not mean an existing Call of Duty studio has simply been assigned a Halo project. Microsoft is describing a newly assembled team within Activision, although it has not yet disclosed the project’s title, release window, platforms, staffing level or creative leadership.
Activision president Rob Kostich said the company’s ambition is to create a Halo game that respects the series’ legacy and the qualities players associate with it. For now, however, that is a statement of intent rather than evidence of how the new game will play. Microsoft has not shown gameplay or announced further production details.
Rare and World’s Edge also move under Activision
Halo is only one part of the reorganisation. Activision’s remit is expanding to include Rare and World’s Edge, placing the teams associated with Sea of Thieves and Age of Empires under the publisher’s wider organisation. Elsewhere, Obsidian Entertainment is moving under Bethesda and will continue its current projects, including Grounded and a new Fallout project being made with Bethesda Game Studios.
Microsoft is also moving Microsoft Casual Games under King, while Playground Games and Turn 10 Studios will be combined into a single studio focused on the Forza and Fable franchises. The changes consolidate more of Xbox’s development operation into fewer organisational groups rather than leaving each studio under a separate structure.
268 roles cut as the reset continues
The restructuring has an immediate human cost. Microsoft says 268 roles are being eliminated in this round across Halo Studios, other first-party teams and central Xbox Game Studios functions. The company has not provided a studio-by-studio breakdown of all affected positions in its public message.
There are also unresolved studio futures. Microsoft says two separate agreements involving Ninja Theory fell through, and it will begin consultation with employees over a proposed closure while continuing to explore other options. Consultation concerning Arkane is expected to continue through the end of the year.
Other studios have already left Microsoft’s direct ownership. Compulsion Games and Double Fine returned to management in August with their intellectual property, back catalogues and runway funding. Undead Labs has now transitioned on similar terms and, according to Microsoft, State of Decay 3 will still launch on Game Pass on day one through a new publisher.
A different structure for Xbox’s biggest franchises
Microsoft frames the overhaul as an attempt to operate fewer business units, align teams that already work closely together and concentrate publishing expertise. The next Halo is the clearest symbol of that strategy: the franchise remains inside Microsoft’s gaming business, but primary development of its next entry is moving away from the studio created specifically to steward Halo.
What that means creatively is still unknown. Activision’s new Halo team has been announced, but Microsoft has not detailed its composition or how responsibilities will be divided with the remaining Halo Studios staff. Until the company reveals the game itself, the confirmed story is organisational: a new development home for Halo, a smaller support role for Halo Studios and another 268 positions removed as Xbox continues its reset.
