Next Halo game to be made by Call of Duty makers as Microsoft lays off 268 employees: What we know

Microsoft today laid off 268 employees across its gaming business and has handed over responsibility for developing the new Halo game to the makers of Call of Duty.

As per reports, a new team at Activision will now be responsible for creating the next game in the Halo franchise.

Microsoft has confirmed that Activision, the developer behind Call of Duty, will now be responsible for developing the next mainline Halo game. The decision comes as part of a significant shakeup of Xbox Studios, which includes mass layoffs impacting Halo Studios. The restructuring aims to reset Microsoft's gaming business under new leadership.


According to reports, the job cuts are part of ongoing reductions first announced in July. The majority of these layoffs are at Halo Studios.

In July, Microsoft announced plans to cut 3,200 jobs during this financial year as part of a new strategy to make its gaming business profitable.

What we know about the new Halo game

Microsoft has not revealed much about the next Halo game. It has also not specified whether Activision plans to reboot the series or integrate it into its Call of Duty release schedule. Call of Duty has maintained an annual release schedule for 20 years.

The move of Halo to Activision follows a series of challenging releases for the franchise under Xbox's ownership. Microsoft acquired the Halo franchise when it purchased its original developer, Bungie, in 2000. Bungie later became independent from Microsoft in 2007. Bungie then entered a publishing deal with Activision to work on Destiny.

Microsoft established 343 Industries to manage the Halo franchise. 343 Industries released Halo 4 in 2012, followed by Halo 5: Guardians in 2015. The most recent title, Halo Infinite, was released in 2021 after significant delays.

Halo Infinite faced difficulties, while the 2024 remake of the first Halo game, Halo: Campaign Evolved, also encountered issues. In 2024, 343 Industries rebranded as Halo Studios. The studio announced plans to develop multiple new Halo games using Epic's Unreal Engine. These plans were revealed in a video showcasing Project Foundry, an experimental project demonstrating a Halo game built with Unreal Engine.

According to The Hollywood Reporter, the new Halo game "will be a full-feature, mainline installment into the franchise."

Rob Kostich, the president of Activision, said in a statement: “We’re thrilled to welcome Halo, Rare, and World’s Edge to Activision. It’s an honor and a responsibility that we do not take lightly. These teams and their games have inspired fans around the world for decades.

“For Halo, our goal is clear: make the greatest Halo game ever, worthy of its universe and legacy, while staying true to what made players love it in the first place. It is a bold ambition, one that this franchise deserves. We have already begun assembling a purpose-built team, unique in capability and talent, ready and excited to deliver this next chapter with the community. To the World’s Edge and Rare teams, we can’t wait to get to work together.”

Other Xbox studios affected

A number of other studios have also been impacted by today's developments. Xbox has moved Age of Empires developer World's Edge and Sea of Thieves developer Rare under the Activision umbrella.

Bethesda studio will absorb Obsidian, the developer of Fallout, Grounded, The Outer Worlds and Avowed. Obsidian was reportedly working on a new Fallout game.

Turn 10, the developer of Forza Motorsport, is merging with Playground, the developer of Forza Horizon and Fable.

Candy Crush developer King will now include Microsoft Casual Games, which manages titles such as Solitaire, Mahjong and Minesweeper.

Microsoft has also indicated its intention to close Hellblade developer Ninja Theory. This follows two failed attempts to sell the studio. A consultation with staff has begun in accordance with UK employment law. Ninja Theory was developing the third entry in the Hellblade series, titled Senua, but its future is uncertain.

There is no further information regarding the fate of Blade developer Arkane. Microsoft is currently in negotiations with Arkane's management regarding the studio's future. The process is proceeding under French employment law and is further behind that of other Xbox studios. Booty confirmed that consultation with Arkane is ongoing and is expected to continue through the end of the year.

Psychonauts developer Double Fine and South of Midnight studio Compulsion have successfully transitioned to independence as part of the Xbox reset. Undead Labs, the developer of State of Decay, has also transitioned on similar terms. With a new publisher, Undead Labs will release State of Decay 3 day one on Game Pass.