Xbox Hands Halo's Next Game to Call of Duty Studio Activision, Cuts 268 More Jobs
Xbox is laying off 268 employees across Halo Studios, other first-party developers and its Xbox Game Studios management and central functions team, Chief Content Officer Matt Booty announced this week. As part of the same reorganization, Activision, the studio behind Call of Duty, will take over development of the next Halo game, while a smaller team remains at Halo Studios to support the franchise's existing live titles. Activision is also expanding its remit to include Age of Empires developer World's Edge and Sea of Thieves developer Rare.
The cuts extend a restructuring plan Xbox announced in July under new CEO Asha Sharma, who replaced Phil Spencer earlier this year. That plan called for roughly 3,200 layoffs over 12 months, with 1,600 positions already eliminated. Booty said the moves completed since July, including several studio divestitures, put Xbox about three-quarters of the way through the planned restructuring. Compulsion Games, Double Fine Productions and Undead Labs have all been spun out as independent studios with rights to their own IP, while Ninja Theory, maker of Hellblade, is now facing a proposed closure after two separate agreements to save the studio fell through. Arkane Studios remains under a consultation period in France that is expected to run through the end of 2026.
Halo, created by Bungie and later developed by Halo Studios (formerly 343 Industries), has been a flagship Xbox franchise since 2001. Activision President Rob Kostich said in a statement that the company is assembling a dedicated team for the next installment and called leading the franchise "an honor and a responsibility that we do not take lightly."
The case for:
Activision's experience running Call of Duty's live-service infrastructure could give Halo more consistent resources and a steadier release cadence than Halo Studios has managed in recent years.
Spinning out smaller studios like Double Fine and Compulsion with their own IP rights gives those teams more creative independence than they had inside a shrinking Xbox portfolio.
Consolidating development under fewer, larger studios mirrors a broader industry shift toward efficiency after years of unprofitable game spending across the sector.
The case against:
Handing a story-driven franchise like Halo to a studio built around Call of Duty's shooter formula risks flattening what made the series distinct in the first place.
Another 268 layoffs on top of 1,600 already cut this year erode institutional knowledge and morale built over more than two decades at Halo Studios.
The proposed closure of Ninja Theory alongside these cuts shrinks the diversity of creative voices inside Xbox's studio system at a time when the lineup is already thinning.
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#Xbox #Halo #VideoGames #Microsoft #GamingIndustry
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