Xbox has announced a major restructuring that includes significant layoffs and a pivotal change in the development of its flagship franchise, Halo. As part of this new phase, Activision Blizzard will now be responsible for creating future Halo games, marking the end of an era for the studio historically dedicated to the series and signifying a symbolic close to a long-standing rivalry between two of gaming's most prominent first-person shooters.
A memo from Xbox executive vice president Matt Booty confirmed that Halo Studios will undergo restructuring, with a "small team" remaining to support existing Halo titles. The bulk of new Halo game development will transition to Activision, the publisher behind the Call of Duty series. This move comes as part of a broader wave of 268 job cuts announced by Xbox.
Halo has been synonymous with the Xbox brand since its inception. The franchise's debut, Bungie's 2001 title Halo: Combat Evolved, was instrumental in the original Xbox's success. Its sequels, Halo 2 and Halo 3, are still widely regarded as landmark titles in the first-person shooter genre. Following Microsoft's acquisition of Bungie, 343 Industries was formed to carry the Halo torch, producing titles such as Halo 4, Halo 5, and Halo Infinite.
Despite critical acclaim for some entries, 343 Industries' tenure was often marked by challenging launches and fan reception. Halo 4 was the first entry to notably divide the fanbase, while the Halo: Master Chief Collection required extensive post-launch support to achieve stability. Halo 5 faced criticism for deviating too far from the series' core identity, drawing comparisons to Call of Duty. The ambitious Halo Infinite, intended as a decade-long live service, also faced development hurdles, including a significant delay that impacted its launch messaging and a final development phase that saw active work conclude earlier this year.
In 2025, 343 Industries rebranded as Halo Studios and announced its intention to transition to Epic's Unreal Engine, moving away from its proprietary Slipspace engine. This shift enabled the development of Halo: Campaign Evolved, a faithful remake of the original Halo: Combat Evolved. At the time of its announcement, Halo Studios indicated multiple projects were in development, though their current status remains unclear.
The decision to entrust Activision Blizzard with the next Halo installment means a new, dedicated team within the Call of Duty publisher will spearhead the franchise. While this team will be separate from the existing Call of Duty development studios—Treyarch, Infinity Ward, and Sledgehammer Games—their experience in large-scale, iterative game development is expected to influence the future direction of Halo. Players may see the integration of elements commonly associated with Call of Duty, such as streamlined seasonal models and refined menu systems, though the core Halo gameplay mechanics are expected to remain intact, as demonstrated by Halo: Campaign Evolved's success in replicating the franchise's distinct physics and feel.
The move also brings a notable historical irony, given that Halo was often positioned as the antithesis to Call of Duty during their respective peaks. What was once a fan debate of "Halo beats CoD!!!" evolved into "Halo is too much like CoD!!!" Now, with Halo development moving under the umbrella of the Call of Duty house, the question arises whether the franchise can maintain its unique identity amidst the legacy and operational ethos of its new custodians.