Microsoft Hands Halo's Next Game to Activision as Xbox Cuts 268 Jobs and Ninja Theory Nears Closure

By CriticalPixel · 2026-09-22

Microsoft just handed the keys to Halo's next game to Activision, and Halo Studios is not walking away from today unscathed. In a memo posted to Xbox Wire, Xbox chief content officer Matt Booty confirmed that a new, purpose-built team inside Activision will build the next Halo title, separate from the ongoing Call of Duty pipeline. The same memo cuts 268 jobs across Halo Studios, other first-party developers, and Xbox Game Studios management. Booty framed it as continuing the Xbox reset that started with mass layoffs and studio divestitures back in July, and Microsoft says this latest round puts the company about three quarters of the way through that restructuring. For a franchise that has spent a decade bouncing between 343 Industries and Halo Studios rebrands, getting shipped off to the Call of Duty publisher is the biggest swing yet.

Halo Campaign Evolved key art posted by the official Halo account

Rare, World's Edge, and a Shrinking Halo Studios

Activision is not just inheriting Halo. The publisher's remit now stretches to cover Rare, the Sea of Thieves studio, and World's Edge, the team behind Age of Empires. Halo Studios itself gets reduced to a small support crew whose job is keeping the community and existing games running rather than building what comes next. Activision president Rob Kostich called the goal 'the greatest Halo game ever' in a statement carried by GameSpot, which is exactly the kind of line every new custodian says before a franchise either gets fixed or gets buried. Rumors that a Call of Duty studio was quietly prototyping Halo multiplayer go back to earlier this year, when Sledgehammer Games was reportedly attached before that specific project got canceled in July. Whatever Activision builds now starts from scratch with its own team, not that scrapped prototype.

The Rest of the Reset: Bethesda, King, Forza, and Ninja Theory's Likely End

Halo is not the only franchise getting reshuffled today. Bethesda now oversees Obsidian Entertainment, whose in-progress Fallout project and Grounded continue under that umbrella. King, the Candy Crush studio, absorbs Microsoft Casual Games. Playground Games and Turn 10, longtime Forza collaborators, are merging into a single studio focused on Forza and the upcoming Fable. Undead Labs found a new publisher for State of Decay 3, which is still landing on Game Pass day one, and that studio's survival stands in sharp contrast to Ninja Theory. According to Eurogamer, the Hellblade developer is entering a UK consultation process toward closure after two separate deals to sell the studio fell apart. Ninja Theory had only announced its new game, Senua, back in June as a bigger, more ambitious entry in the series, and now the team behind it may not exist by the time anyone gets to play it. Arkane Lyon remains in a separate consultation under French labor law that is expected to run through the end of the year.

Senua key art posted by Ninja Theory announcing its new Hellblade game

Reaction Is Split Between Relief and Dread

Community response on social media is genuinely mixed, not a pile-on in either direction. Some fans are cautiously hopeful, pointing out that anything beats the string of underwhelming Halo releases from the last several years, with one popular reply joking that all Activision has to do is ship a finished game without major bugs to clear the bar. Others are worried specifically about competitive Halo, asking whether the shift threatens the Halo Championship Series and MLG infrastructure that depends on a stable home team. A smaller, more cynical group is treating the move as vindication for years of criticism aimed at the old Halo development structure, while plenty of longtime players just see another logo change on a franchise that cannot seem to find a stable home. Nobody is popping champagne, and nobody is calling this a disaster yet either. Everyone is just waiting to see what Activision's team actually ships.

The CriticalPixel Take

Handing your biggest shooter franchise to the studio that runs Call of Duty is not a neutral move, no matter how the press release words it. Activision knows how to ship a live-service shooter on schedule, but its track record on monetization and seasonal content bloat is exactly what a chunk of the Halo community has spent years complaining about in the games Halo Studios already made. If the next Halo launches with a battle pass built like Warzone's and store rotations priced like Modern Warfare cosmetics, this move will look less like a rescue and more like a hostile takeover dressed up as an upgrade. The more troubling part of today's memo is not Halo at all. It is Ninja Theory potentially closing months after teasing a bigger Hellblade sequel, while executives talk about strengthening franchises in the same breath. Microsoft can call this a reset all it wants, but reset language does not change the fact that another finished pitch, another announced game, and another studio's culture are on the chopping block while the company edges toward the end of its restructuring.

What Happens Next

Microsoft has an internal town hall scheduled for October 6, where Booty says the company will reflect on where the reset stands and preview what he called one of Xbox's strongest lineups in years, though he gave no specifics. Ninja Theory's fate depends on the outcome of its consultation period, and Arkane Lyon's status will not be clearer until France's labor process wraps up later this year. For Halo, the real test starts now: Activision has to staff a purpose-built team, build a game worth the wait, and prove that folding one of gaming's most recognizable franchises into the Call of Duty publisher was worth the trust it just spent.