Xbox restructures: Halo development moves to Activision amid layoffs and studio uncertainty
Microsoft has laid off 268 workers, mostly at Halo Studios, as part of a previously announced reduction of 3,200 positions. The company is moving development of the next Halo game to Activision, while Halo Studios will shift to a support role. A planned sale of Ninja Theory fell through, leaving that studio at risk of closure.
The layoffs are part of a larger reduction of 3,200 positions announced in July, with half already implemented. The cuts hit Halo Studios hardest, following its recent release of Halo: Campaign Evolved. The failed sale of Ninja Theory marks the second failed deal, leaving the studio in a precarious consultation process. Undead Labs is being sold back to its management.
The reshuffle is extensive. Rare and World's Edge now report to Activision, while Obsidian moves under Bethesda. Microsoft Casual Games falls under King, and Turn 10 merges with Playground Games. Activision's president confirmed a purpose-built team is being assembled for the next Halo, though no specific studio has been named.
This restructuring could reshape the gaming landscape for thousands of workers, as repeated layoffs and studio closures create deep uncertainty in the industry. Players may see the Halo franchise evolve under Activision's Call of Duty expertise, potentially altering its creative identity. The failed Ninja Theory sale may signal a broader trend of consolidation, where smaller studios struggle to find buyers, affecting job security and creative diversity across the sector.