Xbox Confirms Activision Will Develop Next Halo Game
Xbox officially confirms Activision will develop the next Halo game with a dedicated team, as Halo Studios faces restructuring and layoffs.
In a massive structural shift for Microsoft’s flagship gaming franchise, Xbox has officially confirmed that Activision will be developing the next mainline title in the Halo universe. The announcement came directly through an internal memo distributed to employees by Xbox Chief Content Officer Matt Booty. Titled “Continuing Our Reset,” the communication outlines the company’s strategic roadmap and organizational restructuring plans moving through 2026.
This decision marks one of the most dramatic operational pivots in the history of the Halo intellectual property. Primary development responsibilities are officially moving away from Halo Studios—formerly operating as 343 Industries—and transitioning into Activision’s extensive development infrastructure. The overhaul coincides with broader internal reorganizations across Microsoft’s gaming division, including noticeable staff reductions and expanded leadership roles for key studio units.
Staff Reductions and Structural Changes Across First-Party Studios
According to details revealed in Matt Booty’s memo, Xbox is eliminating 268 roles across its organizational framework. These staff reductions directly affect staff at Halo Studios, multiple other first-party development teams, as well as executive layers within Xbox Game Studios (XGS) management and central functions.
While Microsoft has not publicly released precise figures regarding what percentage of the 268 total layoffs were concentrated within Halo Studios, the internal note explicitly confirms that only a “small team” will remain at the studio. This indicates that Halo Studios experienced significant downsizings, transforming its core objective from a massive lead development house into a specialized, scaled-down support unit focused primarily on live-service infrastructure and community engagement for existing games.
Activision Steps In with a Dedicated Halo Development Team
Under the newly outlined organizational structure, Activision will take on a considerably larger managerial and operational footprint across Microsoft’s studio roster. Beyond taking on expanded remits for studios such as World’s Edge (creators behind the Age of Empires updates) and Rare (developers of Sea of Thieves), Activision is set to helm the development of the next generation of Halo.
Crucially, Xbox emphasized that assigning Halo to Activision will not detract from or interfere with its existing multi-studio franchise obligations. The upcoming Halo game will be driven by an entirely new, purpose-built development team that operates independently from ongoing Call of Duty projects.
In his message to Xbox staff, Matt Booty detailed the studio assignments explicitly:
“Activision will expand its remit to World’s Edge, as well as Rare. Activision will also be developing the next Halo title, led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty. A small team at Halo Studios will continue supporting the Halo community and games in-market.”
This deliberate separation ensures that Activision’s annual shooter pipeline remains unaffected while allowing a standalone unit within Activision’s network to dedicate full creative and technical resources toward reimagining Halo.
The Future of Halo Studios and What Lies Ahead
For Halo Studios, this realignment closes a major chapter spanning over a decade as the sole caretaker of Master Chief’s story. Having assumed control of the franchise following Bungie’s departure after Halo: Reach, the studio spearheaded major releases including Halo 4, Halo 5: Guardians, and Halo Infinite.
Moving forward, the remaining core team at Halo Studios will focus its efforts on supporting existing active games in the market, ensuring continued service for titles such as Halo Infinite and The Master Chief Collection. Meanwhile, the heavy lifting involved in producing a full-scale, AAA sequel passes to Activision’s new dedicated team.
By combining Activision’s deep first-person shooter development expertise with a fresh team structure, Microsoft aims to breathe new life into its most iconic shooter franchise. As Xbox executes its multi-year organizational reset, players around the world will be watching closely to see how this newly established pipeline shapes the future of the Halo series.
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