Activision to lead next Halo game amid sweeping Xbox reorganisation

Developed over time first seen 2 months ago

The Verge · 2 months ago

Microsoft is restructuring Xbox’s first-party studios, transferring several major franchises between teams and cutting 268 roles. Activision will take over development of the next flagship Halo game, while Halo Studios retains a smaller team supporting existing titles; the changes mark a major shift in the franchise’s direction and may include the closure of Ninja Theory.

Activision will also assume control of Sea of Thieves and Age of Empires, with Rare and World’s Edge affected by the reorganisation. Obsidian is moving to Bethesda to work on a new Fallout project, Turn 10 and Playground Games are merging around Forza Horizon and Fable, and Microsoft’s casual games unit is moving to King. The latest cuts bring Xbox’s total announced reductions this year to nearly 1,900 of 3,200 planned by June 2027.

Sources: 5
Outlets: 5
Left · Centre · Right: 0 · 1 · 0

In short

Activision will develop the next flagship Halo game.
Xbox is cutting 268 more roles.
Several studios and major franchises are being reorganised.

How this story developed

2 months ago The restructuring takes on greater significance given that Activision's new Halo team follows the recent Unreal Engine 5 transition, whilst casual games Solitaire, Mahjong and Minesweeper move to King, with over 1,000 additional redundancies expected before June 2027.
2 months ago The transfer of Halo's future development to Activision's newly created team represents a fundamental shift for one of Xbox's most iconic franchises.
2 months ago Rare and World's Edge are confirmed to face significant disruption as Activision takes control of Sea of Thieves and Age of Empires respectively.
2 months ago Ninja Theory faces likely closure under the restructuring plan, whilst Halo Studios will maintain a smaller team to support existing games as Activision assembles a dedicated squad for the next mainline Halo title.
2 months ago Microsoft announces a major restructuring of Xbox Studios in which Activision will assume control of the next Halo game alongside Sea of Thieves and Age of Empires, with 268 employees laid off and multiple studio reorganisations announced.

22 Sep, 14:52BBC Technology Call of Duty's Activision to make next Halo game as Xbox cuts more jobs
22 Sep, 15:23Rock Paper Shotgun Xbox lay off 268 people as Activision take over Halo and Rare, while Obsidian become part of Bethesda, plus Forza and Fable studios merge
22 Sep, 15:27IGN CONFIRMED: Microsoft Hands Halo to Call of Duty Developer Activision as Part of Seismic Xbox Studios Shakeup
22 Sep, 18:18GamesRadar+ Halo Studios didn't get to launch even one original title before Xbox decided to let Activision try
22 Sep, 18:38The Verge Activision to lead next Halo game amid sweeping Xbox reorganisation

Full account

Microsoft is pursuing a substantial reorganisation of its gaming operations, announcing further far-reaching structural changes across multiple development studios. This latest round of alterations represents a continuation of what the company has characterised as its most significant Xbox restructuring in history, building upon earlier redundancy announcements that have cumulatively affected thousands of employees.

The most significant development involves Call of Duty publisher Activision assuming full development responsibility for the next major instalment of the Halo franchise, departing from the current arrangement whereby Halo Studios manages the series. The existing Halo Studios will transition to a maintenance role, supporting the existing player community and maintaining current titles including Halo Infinite and the recently released Halo: Campaign Evolved. Industry observers have underscored the substantial implications of this shift, particularly given Halo's foundational importance to the Xbox brand since Microsoft's market entry in 2001.

The organisational restructuring extends considerably beyond Halo. Activision is simultaneously acquiring control of Sea of Thieves, with Rare's United Kingdom development workforce transitioning under Activision's remit. The Age of Empires studio World's Edge is likewise moving under Activision's oversight, whilst Obsidian Entertainment has been repositioned to collaborate with Bethesda on a forthcoming Fallout project. Concurrently, Turn 10 Studios and Playground Games are consolidating into a single entity focused on future Forza and Fable releases.

Approximately 268 redundancies form part of this announcement, layered atop the 1,600 staff reductions disclosed in July as part of the broader restructuring initiative. Microsoft has indicated that the gaming division is now approximately three-quarters through a planned restructuring affecting 3,600 roles in total. The company's leadership has attributed the necessity for these changes to inadequate growth in platforms including its Game Pass subscription service, alongside external pressures from escalating hardware and computing costs. Cambridge-based Ninja Theory, the BAFTA-award-winning developer behind the Hellblade series, faces a proposed closure following unsuccessful efforts to identify an external purchaser for the studio.

Where outlets differ

From the full account, which is AI-written from the sources:

Source 1 emphasises specific studio transitions and personnel departures (Craig Duncan, Louise O'Connor), whilst Source 2 prioritises Ninja Theory's closure prospects and executive justifications for the restructuring.

Source 2 provides strategic context through executive commentary regarding Xbox division health and market growth failures; Source 1 focuses on completed studio reassignments.

Source 1 references additional moves (casual games portfolio to King, Obsidian to Bethesda) not detailed in Source 2.

Source 2 frames the changes within a broader company-wide 'reset' narrative with historical perspective; Source 1 treats announcements as discrete studio realignments.

Source 2 incorporates third-party analyst perspectives questioning Halo's revival prospects; Source 1 relies solely on official corporate statements.

Steelman: both sides, in good faith

The strongest fair case each way — we don't pick a winner.

The case for

Microsoft's restructuring reflects pragmatic consolidation seeking efficiency and focused expertise. By centralising franchises under studios with proven track records in those genres—Activision with shooters, merged Turn 10 and Playground Games with racing and action—the company aims to produce higher-quality titles whilst reducing operational overhead. This strategic refocus on profitability, rather than sprawling multi-studio development, could ultimately strengthen Xbox's game portfolio by allowing fewer, more polished releases.

The case against

The cuts represent a concerning retreat from gaming's competitive front, with nearly 1,900 redundancies draining institutional knowledge and demoralising remaining staff. Surrendering Halo to Activision risks diluting a flagship franchise's identity, whilst potential Ninja Theory closure eliminates a studio prised for original creative vision. Rather than building capability through this upheaval, Microsoft appears to be contracting, creating fewer diverse voices and single-studio dependencies that threaten long-term competitive resilience.

Explained simply

Xbox is Microsoft’s video-game business, which owns studios making major series such as Halo, Forza, Fable, Fallout, Sea of Thieves and Age of Empires. These games have traditionally been developed by different teams, including 343 Industries’ successor, Halo Studios, Rare, Bethesda, Obsidian, Turn 10 and Playground Games.

Activision is another major games publisher owned by Microsoft, best known for Call of Duty. Giving it a larger role in Halo and other established Xbox franchises would change how those series are managed and developed.

The reorganisation matters because it could affect the future direction, staffing and release plans of several of Xbox’s best-known games. It also reflects wider changes in Microsoft’s first-party games business, as the company reshapes teams and reduces its workforce.