Activision is now in charge of the Halo franchise following a substantial wave of layoffs at Microsoft's Xbox division. Halo Studios, formerly known as 343 Industries, has been designated as a support studio for existing Halo titles.
As detailed in an Xbox Newswire article titled "continuing our reset," Microsoft is reducing its workforce by 268 employees across Halo Studios and other first-party divisions. This follows previous announcements of significant workforce reductions, with Microsoft aiming to cut its total workforce by 3,200 people over the current fiscal year.
Under this new structure, Activision will lead the development of the next Halo game with a dedicated team separate from ongoing Call of Duty projects. A smaller contingent at Halo Studios will focus on supporting the community and live games. Previously, Halo Studios was responsible for sequels such as Halo 4, Halo 5: Guardians, and Halo Infinite, as well as the Halo: The Master Chief Collection. The studio was renamed in 2024 and shifted development from its proprietary Slipspace Engine to Unreal Engine 5.
Xbox chief creative officer expressed a desire to differentiate Halo's development under Activision from Call of Duty, acknowledging the distinct gameplay philosophies of the two shooter series. Halo is characterized by its sandbox environments, vehicles, and longer time-to-kill, while Call of Duty focuses on ADS mechanics, progression, and close-quarters infantry combat.
The announcement has prompted messages of support for affected Halo Studios employees from within the game development community. Former 343 Industries art director Glenn Israel, who previously spoke out about accusations of fraud and cronyism, offered solidarity and resources to those impacted. Another former employee, Bill Rosas, extended well wishes to his former colleagues.
This consolidation effort is part of Xbox's broader strategy to "reset" its gaming business, a move that has drawn criticism and concern about the long-term impact of production-line development on game quality.