THE CRUNCH
Microsoft is handing the Halo franchise to Activision and merging several Xbox studios as part of a wider restructuring that also affects Forza and Age of Empires. The shake-up follows a series of layoffs and sees Halo Studios reduced to a small support team. Activision will lead development of the next Halo game, while Ninja Theory is proposed for closure and Turn 10 will merge with Playground Games.
Halo Studios will continue to support existing titles like Halo Infinite but will not develop the next flagship game, which will instead be made by Activision. The studio will be reduced to a small team focused on community support. This move is part of a broader restructuring that also sees Age of Empires developer World's Edge and Sea of Thieves developer Rare move under Activision. Obsidian Entertainment will be rolled into Bethesda, and Turn 10 will merge with Playground Games to focus on Forza and Fable.
Ninja Theory is proposed for closure after deal negotiations fell through, while Undead Labs has become fully independent. The restructuring also includes 268 job cuts across Halo Studios and other first-party studios, bringing Xbox roughly three-quarters of the way through its previously announced layoffs. Xbox COO Matt Booty stated that the changes are designed to reduce the independence of teams and functions to work toward a shared goal.
Activision President Rob Kostich said the goal is to make the next Halo game worthy of its legacy. The company has already begun assembling a purpose-built team for the franchise. Booty also noted that Xbox will have one of its strongest game line-ups in history by October 6.
Why It Matters: This restructuring signals a significant shift in Microsoft's first-party strategy, moving key franchises to studios with different strengths and potentially reducing the number of internal studios. The closure of Ninja Theory and the reduction of Halo Studios highlight the ongoing cost-cutting measures in the gaming industry.