Xbox Hands Halo to Activision After 268 Job Cuts

Xbox cut 268 jobs on September 22 and handed the next Halo game to Activision, eight weeks after Halo Studios shipped the series’ 25th-anniversary remake. Chief content officer Matt Booty told staff the cuts hit Halo Studios, other first-party teams, and the Xbox Game Studios management layer, and that a new Activision team, kept apart from Call of Duty, will make the next Halo title.

Activision also picks up Rare and World’s Edge. A small Halo Studios group stays on the games already on sale. Ninja Theory, after two failed sales, now faces a proposed closure.

Activision Takes the Next Halo Title

Booty’s note, posted the same day on Xbox Wire under the title Continuing Our Reset, is the primary account of the day. He wrote that Xbox is eliminating 268 roles across Halo Studios, other first-party studios, and the XGS management and central functions layer. The aim, he said, is fewer business units, groups that already work together, and a tighter publishing setup.

Activision will expand its remit to World’s Edge and Rare. It will also develop the next Halo title, “led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty.” Activision is a Microsoft publisher, so the IP is not being sold. The next game will still come from a new team, not from the studio that has shipped every main Halo since 2012.

Rob Kostich, Activision’s president, set the brief in a statement released with the memo. He folded Halo, Rare, and World’s Edge into one welcome, then put a single job on Halo.

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.

Rob Kostich, president of Activision, statement on September 22, 2026

No creative director has been named. Booty’s wording is that the team is already being assembled. The loud worry around the handoff is that Halo becomes a yearly shooter with a ring and a battle pass, because that is the machine Activision already runs. Kostich’s line about a team kept apart from Call of Duty is the company’s answer to that fear, and it is still only a line.

Halo Studios Shrinks to a Support Crew

Halo Studios does not close. Booty said “a small team at Halo Studios will continue supporting the Halo community and games in-market.” Infinite and Halo: Campaign Evolved stay with that group. The next flagship does not.

That is a sharp cut in role for a studio Microsoft created in 2007 as 343 Industries, after Bungie finished Halo: Reach in 2010 and left. 343 shipped Halo 4 in 2012, then Halo 5: Guardians, then Halo Infinite in 2021. In October 2024 it rebranded as Halo Studios, dropped its own Slipspace engine, and moved future work onto Unreal Engine 5. Campaign Evolved, which launched on July 28, 2026, was the first Halo built that way, and the last one this studio will make as lead developer.

Booty listed Halo Studios first in the 268. He did not break out how many of those jobs sat there. The “small team” line is the tell: the people who were building the next new Halo are not the people who will finish it.

THE CUTS INSIDE THE RESET

• September 22: Xbox is cutting 268 roles across Halo Studios, other first-party studios, and the XGS management layer.
• July 6: Xbox CEO Asha Sharma cut approximately 1,600 roles the day she opened the reset.
• Fiscal 2027: Sharma set the full reduction at approximately 3,200 roles.
• Progress: Booty wrote that actions since July, including studio sales, bring Xbox roughly three-quarters of the way through that plan.

Some longtime players wanted this studio broken up after Infinite’s rocky years and are treating the handoff as overdue. That view does not change the payroll fact. A support crew in Redmond is not a full Halo developer.

The Remake Shipped Eight Weeks Earlier

Halo: Campaign Evolved launched on July 28, 2026, with early access on July 23. It rebuilds the 2001 Halo: Combat Evolved campaign in Unreal Engine 5 and adds Operation: METEORITE, a three-mission story that sits a year before the first game and puts Master Chief beside Sgt. Johnson. The original 10 missions plus those three make 13.

It is also the first Halo campaign on PlayStation 5. Xbox Wire listed Xbox Series X|S, PC, cloud, Steam, and PlayStation 5, with day-one Game Pass Ultimate and PC Game Pass, plus cross-play and cross-progression. Halo’s official site called out four-player network co-op cross-play across Xbox, PlayStation 5, and PC, and two-player split-screen on consoles. The exclusive that sold the original Xbox already lived on Sony hardware before Activision got the next one.

The timing is ugly for the people who made it. Campaign Evolved was sold as the 25th-anniversary return to the ring, the first Halo Studios game on Unreal, and a pitch that the studio had changed how it works. Fifty-six days later, Booty told the company Activision would develop the next title and that only a small team would stay on the games already out. The remake is now the studio’s farewell as lead developer, whether anyone billed it that way in June.

Microsoft closed its $68.7 billion purchase of Activision in October 2023, after a deal announced in January 2022. The pitch then was Call of Duty, Candy Crush, and a bigger Xbox. Almost three years later, the publisher Xbox bought to own a yearly shooter is the publisher assigned to Halo.

Rare and Age of Empires Follow Halo

The Halo move is the headline. The same sentence in Booty’s memo hands Activision two other Microsoft studios. World’s Edge, the Redmond team on Age of Empires, reports to Activision now. So does Rare, the British studio on Sea of Thieves.

Rare has been an Xbox studio since 2002. Sea of Thieves is still live; Custom Seas, which lets players build modes inside the pirate game, showed up at the most recent Xbox Games Showcase. The studio’s last big new project, Everwild, was cancelled during Xbox cuts in 2025. Putting Rare under Activision without a named new game is why some players jumped past Halo and asked what happens to Banjo-Kazooie. Booty’s memo does not say. Kostich only said Activision cannot wait to work with those teams.

World’s Edge last shipped Age of Mythology: Retold in September 2024. Age of Empires is a live strategy brand, not a yearly shooter, which makes the Activision grouping look like a publisher bucket for big catalog franchises rather than a single genre plan. Halo, Sea of Thieves, and Age of Empires now share a boss whose public catalog is still defined by Call of Duty.

Two Ninja Theory Deals Fell Through

The other half of September 22 is the studio sales Sharma started in July. Four smaller Xbox Game Studios teams were supposed to leave. Three have. One has not.

WHERE THE FOUR STUDIOS LANDED

• Double Fine: In August the Psychonauts studio returned to management with its IP, back catalog, and runway funding.
• Compulsion Games: South of Midnight’s studio left on the same independent terms in August.
• Undead Labs: The State of Decay team has now moved on similar terms, and with a new publisher it will still release State of Decay 3 day one on Game Pass.
• Ninja Theory: Two separate agreements fell through. Xbox has begun consultation with staff on a proposed closure and says it is still looking at other paths.

Ninja Theory, the Cambridge studio behind Hellblade: Senua’s Sacrifice and Senua’s Saga: Hellblade II, had looked like the one that would get out clean. Sharma’s July memo said Ninja Theory and Undead Labs “have entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3.” Undead Labs finished that trip. Ninja Theory did not.

Senua, a new Hellblade game, was shown at the June Xbox Games Showcase as a 2027 release. Booty’s September note does not mention the game. A proposed closure under UK consultation is not a locked shutdown, and a late buyer can still appear. Until one does, the studio that made Hellblade is the reset’s failed sale, and Senua has no named home.

Arkane is still in consultation, which Booty said should run through the end of the year. That process started in July. It is the other open studio question, and it is not Halo.

Bethesda, King, and One Forza Studio

The rest of the reorg is pairing, not a sale. Obsidian moves under Bethesda and keeps Grounded, plus “the new Fallout project made in collaboration with Bethesda Game Studios.” King takes Microsoft Casual Games, the group behind Solitaire and Minesweeper. Playground and Turn 10 become one studio on Forza and Fable. Booty noted those two have been creative partners for more than a decade; the change writes that into one team.

Those moves are easier to defend as housekeeping than Halo is. Fallout sitting with Bethesda and Obsidian on one project is how that series already works in public. Forza Horizon and Forza Motorsport sharing a studio is a brand under one roof. Casual puzzles under King is a live-ops stack next to Candy Crush. None of that requires a new publisher for Master Chief.

WHO REPORTS WHERE AFTER SEPTEMBER 22

The table is the reset in miniature. Big franchises get a bigger publisher. Small author studios get sold, or they do not, and then they face closure. Halo is the case that does both: the brand goes up the chain, and the studio that carried it is left as a help desk.

The Reset Still Has Work Left

Sharma, who became Xbox CEO in February 2026 after running product for Microsoft’s AI tools, opened this year by telling staff Xbox had to change shape. In a June note with Booty she wrote that, excluding Activision Blizzard King, Xbox had spent over $20 billion across five years on content, platform, and hardware subsidy while annual revenue fell by nearly half a billion. In July she called the job cuts the most significant restructure in Xbox history, set the total at approximately 3,200 roles through fiscal 2027, and cut approximately 1,600 that day. She also said four studios would leave, named a new chief operating officer in Helen Chiang, and wrote that the industry is in “the most severe hardware crisis in its history.”

HOW THE XBOX RESET UNFOLDED

1. February 2026: Asha Sharma joins as Xbox CEO.
2. June 7, 2026: Xbox dates Halo: Campaign Evolved for July 28 and shows Senua as a 2027 Ninja Theory game.
3. July 6, 2026: Sharma announces approximately 3,200 role cuts, eliminates approximately 1,600 immediately, and says four studios will leave.
4. July 28, 2026: Halo: Campaign Evolved launches on Xbox, PC, and PlayStation 5.
5. August 2026: Double Fine and Compulsion return to independent management with their IP and funding.
6. September 22, 2026: Booty cuts 268 roles, moves the next Halo game to Activision, and opens a proposed Ninja Theory closure after two deals fail.
7. October 6, 2026: Xbox holds an all-company town hall to review progress and preview the lineup.

Booty wrote that work since July, counting the studio sales, puts Xbox roughly three-quarters of the way through the plan Sharma set. He did not publish a remaining headcount, and the 268 plus the July 1,600 do not by themselves equal three-quarters of 3,200; the divestitures are what he used to close that gap. He said he would spend the following week with the studios. The October 6 town hall is where he said the company would “look ahead to one of the strongest game lineups in our history.”

The next Halo game will come from a team that is still being hired inside Activision. A small group in Redmond will keep Infinite and Campaign Evolved running while that happens. Ninja Theory’s consultation is open. About a quarter of Sharma’s reset, on Booty’s own fraction, is still ahead.