The changes place one of Xbox’s defining franchises inside a broader consolidation of Microsoft’s game-development operations. They also follow a restructuring Microsoft announced in July, when it outlined approximately 3,200 workforce reductions throughout fiscal 2027. For players, the immediate news concerns the organization behind the games; for employees, it is another round of consequential changes within that organization.
Activision takes the next Halo game without absorbing it into Call of Duty
The most important detail in the Halo handover is the structure of the development team. Variety, quoting Matt Booty, reports that the next game will be “led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty.” That wording identifies Activision as the responsible organization without assigning the project to a named Call of Duty studio.
That is a meaningful boundary. An Activision-led Halo project could easily be interpreted as a reassignment of an existing Call of Duty development operation, but the reported announcement describes a distinct team. It provides no basis for naming Infinity Ward, Treyarch, or Sledgehammer Games as Halo’s developer, or for predicting that Halo will adopt another franchise’s release schedule or design.
The arrangement also divides new development from existing-game support. Booty’s message says a small team at Halo Studios will continue supporting the Halo community and games already in market. The announced division of responsibility therefore leaves an ongoing role for Halo Studios while placing the next title elsewhere. It gives players an identifiable support organization, although it supplies no detailed commitment about update frequency or the duration of support.
Activision’s expanded remit extends beyond Halo. Both Variety and The Verge report changes involving Rare and World’s Edge, with The Verge identifying Sea of Thieves and Age of Empires alongside Halo in the reshuffle. Taken together, these moves make this a broader reorganization of franchise oversight, with Halo as its most conspicuous development assignment.
The Xbox layoffs follow a restructuring already scheduled across fiscal 2027
According to The Verge, Microsoft is laying off around 268 Xbox employees in the September restructuring. That figure accompanies the change in studio responsibilities, making the handover part of a personnel and organizational reset rather than an isolated creative announcement.
Microsoft’s July 6 Xbox Wire message supplies the relevant baseline. It announced plans to reduce the workforce by approximately 3,200 throughout fiscal 2027, including approximately 1,600 immediate role eliminations. Microsoft explicitly described a year-long process and said it could not make all the necessary changes in a single day.
The September number should therefore be read alongside that earlier plan, not automatically added on top of it. The available reporting does not resolve whether these approximately 268 positions sit within the announced fiscal-year total. Treating them as an entirely separate increase would produce a cumulative figure the evidence cannot support.
The July announcement also explained Microsoft’s intended operating changes. It called for reducing management layers to no more than five, and where possible three, while simplifying tools, sharing services, and reducing vendor spending. Microsoft presented those changes as ways to shorten decisions and clarify responsibility.
That context helps explain the organizational logic of placing additional studios and franchises under Activision. The inference is that Microsoft is using larger operating groups to concentrate responsibility. Whether that arrangement improves game development will depend on execution; the reporting establishes the reassignment, not its eventual results.
Halo players should separate development news from purchase decisions
Players considering hardware or subscriptions should wait for the next Halo game’s actual release and platform announcement before making a purchase around it. A change in the responsible development organization supplies no compatibility information, PC requirements, or subscription entitlement.
The reporting also leaves the project’s identity insufficiently defined to connect it confidently to a particular previously discussed Halo release. Calling it “the next Halo game” preserves the announcement’s scope. Assigning it a subtitle, a release window, or a specific campaign or multiplayer format would go beyond the evidence.
Microsoft’s July reassurance about cancellations has a similarly important boundary. At that time, the company said none of its publicly announced first-party games or projects were being cancelled as part of those July reductions. That statement describes the July action; it is not a blanket guarantee covering every later restructuring decision.
The concrete takeaways are these:
- Activision will lead development of the next Halo title through a new, purpose-built team separate from ongoing Call of Duty work.
- A small Halo Studios team will continue supporting the existing Halo community and games in market.
- The approximately 268 reported September layoffs should not be added to July’s planned 3,200 reductions without clarification about how the figures overlap.
- Windows PC availability, console availability, release timing, and subscription access remain unannounced in this reporting.
- Existing-game support and responsibility for a future release are separate assignments, so the handover alone is no reason to infer an immediate change to a player’s current library.
Xbox is concentrating responsibility before showing the next Halo
The broader significance is clearer than the product implications. Microsoft is giving Activision responsibility for a major Xbox franchise while expanding its oversight of other studios, at the same time that Xbox continues reducing its workforce. This concentrates more development responsibility within one of Microsoft’s publishing organizations.
Microsoft’s stated July objective was a simpler structure with clearer accountability. The Halo arrangement gives that ambition a concrete expression: Activision takes the next game, while a smaller Halo Studios operation supports what players already have. The structure identifies responsibility more clearly than it answers questions about the game itself.
For now, the informed decision is to recognize the organizational change without treating it as a product announcement. Activision’s next substantive Halo disclosure—identifying the team, the project, and its intended platforms—will give players the information needed to plan around the release. Until then, the confirmed consequence is a new development home for Halo’s future alongside another painful reduction in Xbox’s workforce.
Update: Microsoft confirms 268 Xbox cuts and says restructuring is about 75% complete (September 22, 2026)
Microsoft has now officially confirmed that it is eliminating 268 roles across Halo Studios, other first-party studios, and the Xbox Game Studios management and central-functions layer. The company says the action puts it “roughly three-quarters” of the way through its previously announced restructuring, according to Xbox Wire as reported by XDA Developers.
That clarification turns the previously reported September reduction into a confirmed component of the broader fiscal-2027 plan rather than a figure based solely on outside reporting. It also provides a clearer indication that further workforce changes may still be ahead before the restructuring concludes.
Microsoft’s statement likewise confirms the organizational assignment: Activision will develop the next Halo title through a newly created team separate from Call of Duty work, while a small Halo Studios team remains responsible for supporting Halo games already on the market.
Update: Xbox reorganization reportedly adds Bethesda, King, and major studio changes (September 22, 2026)
According to MobileSyrup’s account of Matt Booty’s staff memo, Xbox’s restructuring reaches beyond Halo, Rare, and World’s Edge. Bethesda is set to expand to include Obsidian, while King will take in Microsoft Casual Games. Booty reportedly said Obsidian will continue work including Grounded and a new Fallout project with Bethesda Game Studios.
The memo also reportedly merges Playground Games and Turn 10 into a single studio focused on the Forza and Fable franchises. That is a more direct operational consolidation than the earlier franchise-oversight changes and could affect how Xbox allocates development resources across two of its largest racing and role-playing properties.
MobileSyrup further reports that Undead Labs has transitioned under terms similar to Double Fine and Compulsion Games, while State of Decay III remains planned as a day-one Xbox Game Pass release. Two proposed agreements involving Ninja Theory reportedly fell through, prompting consultation on a possible closure; consultations involving Arkane are expected to continue through the end of the year.
Update: Ninja Theory reportedly shuttered as Activision’s Halo plans take shape (September 22, 2026)
The Hollywood Reporter reports that Ninja Theory is being shuttered, a more definitive outcome than the earlier consultation process reported around the Xbox reorganization. Microsoft has not separately published a public confirmation in the material cited by the outlet, so the status should be treated as reported rather than formally announced by the company.
The report also adds that Activision’s next Halo project is expected to be a full-featured, mainline franchise installment. Activision president Rob Kostich said the company has already started assembling the purpose-built Halo team and described its objective as delivering a game that remains true to the elements players value in the series.
These details still do not establish a title, release window, platforms, or whether the game will be included with Game Pass.
Update: Additional details (September 22, 2026)
GamesRadar+ reports that former Blizzard president Mike Ybarra praised the Activision handover, calling it “the best news in a decade plus” for Halo fans. Ybarra specifically highlighted Activision president Rob Kostich, development head Dave Stohl, and Call of Duty creative lead Pat Kelly, but his comments are personal opinion rather than a Microsoft or Activision commitment.
The outlet also reports that Matt Booty plans to discuss the restructuring’s progress at an Xbox all-staff town hall scheduled for October 6. That could be the next internal milestone for further details, although Microsoft has not announced that the event will include public news about Halo’s team, platforms, release timing, or Game Pass plans.
Update: Additional details (September 22, 2026)
Game Developer reports that Blizzard was not included in this round of announcements. The outlet viewed an email from a senior Blizzard leader telling employees they were not impacted, and says an Xbox representative confirmed the email was legitimate.
That confirmation applies specifically to the September 22 actions, rather than guaranteeing Blizzard will be unaffected by any later changes in Microsoft’s broader fiscal-2027 restructuring.
Update: Additional details (September 22, 2026)
According to Rock Paper Shotgun, Undead Labs has become an independent, employee-owned studio and has secured a new publisher for State of Decay 3. The outlet says the game is still targeting a 2027 release.
Those details add specificity to the earlier report that Undead Labs had moved to an arrangement similar to Double Fine and Compulsion Games. They do not alter the previously reported plan for State of Decay 3 to launch into Xbox Game Pass.
Update: Additional details (September 22, 2026)
TechSpot reports that Halo Studios’ remaining support role specifically includes Halo: Campaign Evolved and Halo: The Master Chief Collection, while Activision’s new team handles the next title.
The outlet also says Obsidian will continue work on Grounded 2 under Bethesda, alongside its collaboration with Bethesda Game Studios on a new Fallout project.
Update: Halo Studios cinematic director says he was laid off after a promotion (September 22, 2026)
GamesRadar+ reports that Josh Daniels, formerly Halo Studios’ cinematic director, said he was among the employees affected by Microsoft’s latest Xbox reductions. In a LinkedIn post cited by the outlet, Daniels said he had been “promoted and laid off in the same week,” and is now seeking cinematic direction or production work.
The disclosure provides a more specific indication of the roles affected at Halo Studios as its responsibilities narrow to supporting existing games while Activision assembles a team for the next Halo title. Microsoft has confirmed the broader 268-role reduction, but it has not publicly detailed Daniels’ position, the timing of his promotion, or the full extent of cuts within Halo Studios.
