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Microsoft hands the next Halo to a team Activision is still assembling
The Xbox reorganization eliminates 268 roles, puts Rare and World's Edge under Activision, and leaves Halo Studios supporting Halo Infinite with a small crew. Announced Xbox cuts this year now reach nearly 1,900.
The Product Desk · Product desk
What happened
- Activision takes over Halo, Sea of Thieves and Age of Empires, and the next flagship Halo will come from Activision while Halo Studios keeps supporting Halo Infinite and Halo: Campaign Evolved.
- Booty's memo says Microsoft is eliminating 268 roles across Halo Studios, other first-party studios, and the Xbox Game Studios management and central functions layer.
- Microsoft has said 3,200 roles will be affected by Xbox cuts through its 2027 financial year, and this round takes the announced total to nearly 1,900.
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Why it matters
- cost Microsoft absorbed the cost of moving Halo to Unreal Engine 5 and rebuilding Halo Studios' leadership, work the team that will make the next flagship had no part in.
- exposure The Verge reports Microsoft is likely closing Ninja Theory. Without a company announcement, the studio's staff and anyone contracted to it are planning around press reporting.
- precedent Halo sets the pattern for how a first-party studio can expect to be treated: it keeps the live-service tail on shipped games while the sequel begins inside a publishing unit.
A player who files a matchmaking bug in Halo Infinite this week still gets an answer from Halo Studios. "A small team at Halo Studios will continue supporting the Halo community and games in-market," Xbox chief content officer Matt Booty wrote in an internal memo [7]. Activision is still putting together the team that will make the next one. Activision president Rob Kostich said, "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" [11].
So the franchise and the people who shipped it are now in different places. Halo Studios, formerly 343 Industries, moved Halo development to Unreal Engine 5 less than two years ago [8], after a leadership overhaul and earlier layoffs [9]. It keeps Halo Infinite and Halo: Campaign Evolved [5]. The next flagship starts at the publisher that runs Call of Duty, on a team Booty described as "separate from ongoing development and plans for Call of Duty" [6], with no release window reported by the Verge [26].
Microsoft has said 3,200 roles will be affected by Xbox cuts during its 2027 financial year, which ends in June 2027 [20]. Add today's 268 to the 1,600 cut earlier and the announced total is 1,868, leaving about 1,300 unnamed [24]. By the Verge's count that is nearly 1,900, with more than 1,000 roles still to come [21]. The company says it is "roughly three-quarters of the way through previously announced restructuring," counting actions since July including the studio divestitures [22]. On headcount alone, 1,868 of 3,200 is 58 percent [25].
The stated goal, in Booty's words, is "to strengthen our franchises and games by operating fewer business units, aligning groups that already work closely together, and focusing our publishing expertise" [23]. On the org chart that means Rare's UK developers and World's Edge move to the Activision side of Xbox [13][12], Obsidian moves to Bethesda for a new Fallout title [17], Turn 10 and Playground Games merge into one studio covering Forza Horizon and Fable [18], and the unit behind Solitaire, Mahjong and Minesweeper moves from Bethesda to King [19]. Whether Rare or World's Edge take layoffs is unclear, the Verge reports [14].
A plan that depends on an Xbox studio depends on two separate things: the franchise, and the team. Licensing, co-marketing and store placement follow the franchise, and for Halo, Sea of Thieves and Age of Empires that now means Activision [2]. Build support, engine questions, live-service cadence and bug triage follow the team, and those teams moved, merged or shrank. The test is whether anyone can be named who will answer an email about it next month. That list has been turning over since June, when Xbox Game Studios head Craig Duncan resigned [15], followed by chief of staff Louise O'Connor, who had worked at Rare since 1999 [16]. The dependencies with nobody to name are the ones sitting in the roughly 1,300 roles Microsoft has not announced [24].
What to watch
- Whether Microsoft confirms the closure of Ninja Theory, so far reported as likely by the Verge.
- Whether Rare and World's Edge take cuts in the roughly 1,300 roles still unnamed in the 3,200 total.
- Who leads Activision's new Halo team, and whether it hires from Halo Studios or staffs from outside.