Xbox hands next Halo game to Activision as 268 jobs are cut

Rituraj Halder Published September 23, 2026

In one of the biggest structural shifts in recent gaming history, Microsoft is officially handing the keys to its flagship franchise, Halo, over to Call of Duty developer Activision. This massive move comes as part of an ongoing “reset” of Xbox, accompanied by another brutal round of 268 layoffs across its first-party network and a total reshuffling of iconic legacy studios.

Following an earlier wave of 1,600 cuts during the summer, Xbox Chief Content Officer, Matt Booty confirmed in a company blog post that Microsoft is continuing to streamline operations. 

The hardest hit in this latest round is Halo Studios (formerly 343 Industries), which was effectively gutted. While a skeleton crew will stay behind to maintain existing live-service titles and community support, future mainline Halo development is being fully transferred to a newly established, dedicated team inside Activision.

Xbox hands over Halo to Call of Duty Devs

This new shift means two of the biggest FPS titles of all time, Call of Duty and Halo, are now being developed under the exact same corporate umbrella. Microsoft’s $68.7 billion acquisition of Activision Blizzard in 2023 has finally come full circle, letting the people responsible for Black Ops 7 and Modern Warfare 4 build the next entry in Master Chief’s adventures. 

The publisher will also absorb legendary British studio Rare (Sea of Thieves) and Age of Empires developer World’s Edge.

Meanwhile, Xbox is shuffling its other major players: Fallout: New Vegas developer Obsidian Entertainment is officially moving under Bethesda to collaborate on future Fallout projects, while mobile giant King is swallowing Microsoft Casual Games. 

The blog also mentioned that the Forza developers Turn 10 and Playground Games are officially merging, and State of Decay developer Undead Labs has successfully transitioned out of Xbox under a new publisher.

Despite executive framing around “strengthening franchises” and operating fewer business units, the human cost behind this corporate reset is extremely severe.

Beyond the 268 positions eliminated on Tuesday, Xbox revealed that Hellblade developer Ninja Theory is facing a proposed closure after two separate buyout deals collapsed. Similarly, French studio Arkane remains locked in lengthy consultations regarding its future.

For us Xbox fans, seeing Halo yanked away from its traditional creators truly feels like the end of an era. With Activision now holding the reins to Microsoft’s absolute biggest gun, all eyes are on whether the Call of Duty devs can successfully revive the Chief, or if the franchise is simply losing its original soul in the corporate meat grinder.

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