Xbox has announced major restructuring that includes 268 job cuts, with Halo Studios facing significant downsizing as part of the shake-up. Most strikingly, Activision—the developer behind Call of Duty—will now develop the next Halo game, whilst only a small team at Halo Studios will remain to support existing titles. This represents a symbolic end to a decades-long rivalry between the two franchises and marks a watershed moment for one of gaming's most iconic series.

Halo has been integral to Xbox's identity since Bungie's 2001 original launched the platform, with Halo 2 and Halo 3 considered amongst the greatest first-person shooters ever made. However, the franchise has struggled in recent years: Halo Infinite launched in 2021 to 20 million players but failed to retain its audience, lacking features present in earlier games and shipping with an incomplete experience. The original developer, 343 Industries, had been managing both game development and maintaining a proprietary Slipspace engine, before rebranding as Halo Studios in 2025 and pivoting to Unreal Engine.