Activision Will Develop the Next Halo as Halo Studios Is Cut Back

In one of the biggest changes to Xbox’s flagship shooter in decades, Halo is changing development leadership again, with Microsoft confirming that Activision will build the franchise’s next game instead of Halo Studios.

The decision was announced on September 22 as part of Microsoft’s continuing Xbox restructure. Xbox chief content officer Matt Booty said the next Halo will be led by a new “purpose-built” Activision team, while a much smaller Halo Studios operation remains responsible for the community and games already on the market.

Microsoft has not revealed the title, release window or premise of the game, but Activision president Rob Kostich says recruitment for the new development team has already begun.

Kostich has set an ambitious target, saying Activision wants to create the “greatest Halo game ever” while preserving the qualities that originally attracted players to the series. He described the project as a responsibility the company does not take lightly and said the new team is being assembled specifically for Halo.

The Activision name immediately creates an obvious assumption, but Microsoft has already ruled out one interpretation of the announcement.

The new Halo group will be separate from Activision’s ongoing Call of Duty development and plans. Microsoft has not announced involvement from Treyarch, Infinity Ward, Sledgehammer Games, Raven Software or any of the other studios normally associated with Call of Duty.

That means this is not currently a case of Microsoft handing Master Chief directly to an existing Call of Duty studio. Activision is instead establishing a dedicated development team inside its organisation for Halo.

I think that is the most important detail beyond the headline itself. Activision brings decades of experience operating one of gaming’s largest shooter businesses, but Microsoft appears to be creating a separate Halo development structure rather than trying to turn the series into another branch of Call of Duty.

Exactly who will lead that team remains unknown. Microsoft and Activision have not disclosed its studio location, senior creative leadership, headcount or how many developers from Halo Studios could potentially move across.

The technology behind the new game is another unanswered question.

GLN covered how 343 Industries became Halo Studios and committed its future projects to Unreal Engine 5 in October 2024. At the time, Halo Studios said multiple projects were in development using Unreal and presented Project Foundry as the technological foundation for the franchise’s next generation.

Microsoft’s new announcement does not confirm whether Activision’s project is one of those games, an evolution of work already underway or something being created from scratch.

It also does not say whether Unreal Engine 5 remains mandatory for the Activision-developed title.

That leaves a significant unanswered question around the other projects Halo Studios publicly said it was developing in 2024. Microsoft has not announced that they are cancelled, transferred to Activision or continuing independently.

The other half of this announcement is arguably just as significant as Activision taking the next game.

Halo Studios, previously known as 343 Industries, will remain in existence, but Microsoft says only a small team will continue supporting the Halo community and games currently on the market.

Microsoft simultaneously announced the elimination of 268 roles across Halo Studios, other first-party studios and Xbox Game Studios management and central functions.

Importantly, those are not 268 Halo Studios layoffs. Microsoft has not publicly disclosed exactly how many people are leaving Halo Studios or how large the remaining support team will be. Reporting from Game File and Ars Technica indicates the studio took a substantial share of the cuts, but an exact figure has not been published.

The timing is extraordinary.

Halo Studios released Halo: Campaign Evolved on July 28, meaning Microsoft announced the shift to Activision only 56 days later. The remake brought the original campaign to PS5 for the first time alongside Xbox and PC, with cross-platform co-op and substantial additions to Bungie’s original adventure.

Before launch, Halo: Campaign Evolved had also earned Steam Deck Verified status, part of a much broader multiplatform push for a series once inseparable from Xbox hardware.

The shift is even more striking when compared with Microsoft’s messaging only two years ago.

When 343 Industries became Halo Studios in October 2024, studio head Pierre Hintze described Halo as having moved through a Bungie chapter and then a 343 Industries chapter, with the rebrand intended to begin another era built around Unreal Engine 5 and a different development philosophy. Halo Studios said it was growing and working on multiple projects.

Less than two years later, development leadership for the next Halo has changed again.

Activision’s team therefore represents another major transition for a franchise whose primary shooter games were historically led first by Bungie and then by 343 Industries/Halo Studios.

This does not mean Halo Studios is being closed. Microsoft’s wording is quite specific: a small team remains to support the community and existing games. What it no longer appears to have is responsibility for developing the next major Halo title.

The move forms part of a much larger restructuring across Xbox.

Microsoft announced plans in July to eliminate approximately 3,200 Xbox roles during its 2027 financial year, including 1,600 initial cuts. Xbox CEO Asha Sharma described it as the largest restructure in the division’s history and said the company needed fewer layers of management and less fragmentation between teams.

Another 268 positions are now being eliminated, while Activision’s remit expands to include Rare and World’s Edge. Bethesda is taking responsibility for Obsidian, Playground Games and Turn 10 are being merged, and Microsoft has begun consultation over a proposed closure of Hellblade developer Ninja Theory after two attempts to sell the studio fell through.

Microsoft says these changes are intended to reduce the number of separate business units and bring teams that already work closely together under common leadership.

For Halo specifically, however, the new state is surprisingly simple.

The team formerly known as 343 Industries will maintain what is already here. Activision’s newly created team gets responsibility for whatever comes next.

What that game actually is remains completely open. Microsoft has not called it Halo 7, confirmed it as a continuation of Halo Infinite, announced Master Chief as its protagonist, given it a release window or confirmed its engine and platforms.

Those details will determine whether Activision is merely changing the name above the door or beginning another genuine reinvention of Microsoft’s most recognisable shooter.