Activision is taking over Halo as part of a massive Xbox shake-up

The Xbox reset continues with major studio changes, layoffs, and more.

The Xbox reset continues with major studio changes, layoffs, and more.

Microsoft is announcing a massive restructuring of its Xbox studios today, months after laying off 1,600 Xbox employees and selling off studios. The latest changes will see Activision take on the Halo and Sea of Thieves franchises, as well as Age of Empires . Microsoft is also laying off around 268 Xbox employees as part of this restructuring, and likely closing Ninja Theory .

Halo Studios will be significantly impacted by today’s changes and layoffs. The studio will continue to support existing titles like Halo Infinite and Halo: Campaign Evolved , but the next flagship installment in the Halo franchise will come from Activision instead.

“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 ,” says Xbox chief content officer Matt Booty in an internal memo . “A small team at Halo Studios will continue supporting the Halo community and games in-market.”

That’s a significant change for the future of Halo , less than two years after Microsoft moved its Halo development to Unreal Engine 5 . Halo Studios, formerly 343 Industries, has also undergone a leadership overhaul in recent years, as well as layoffs .

“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,” says Activision president Rob Kostich. “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.”

World’s Edge, the studio behind the Age of Empires franchise, is joining Activision as part of this shake-up. Activision is also taking control of Sea of Thieves , with Rare’s UK team of developers joining the Activision side of Xbox.

It’s not clear if there are any layoffs impacting Rare or World’s Edge as part of this shuffle. Former Rare studio chief Craig Duncan took on the role of head of Xbox Game Studios in 2024 , and then resigned from Microsoft in June ahead of the big Xbox reset. Xbox Game Studios chief of staff Louise O’Connor also left the company alongside Duncan, after originally starting work at Rare in 1999.

Microsoft is also officially acknowledging that Obsidian is moving over to Bethesda to work in close partnership on a new Fallout title. It’s not clear what kind of Fallout game will emerge, but with the success of the TV series I wouldn’t be surprised to see this particular title closely connected to the show.

Turn 10 Studios and Playground Games are also merging into a single studio , focused on the future of Forza Horizon and Fable . Microsoft is also moving its casual games unit, responsible for Solitaire , Mahjong , and Minesweeper , from Bethesda to King.

This is the second round of Xbox layoffs this year, but it might not be the last.