Activision develops the next Halo game as Xbox cuts 268 jobs

According to the provided sources, that reset is about 75 percent complete; the changes affect Halo Studios and other first-party teams.
Activision will develop the next Halo game with a new team, while Halo Studios will remain in a support role for existing Halo content.

What happened

Microsoft Gaming intervened again in the Xbox organization on 22 September 2026. Kotaku reports that 268 jobs are being cut, spread across Halo Studios, other first-party teams, and central Xbox Game Studios functions. The move is part of a broader restructuring that Microsoft describes internally as a reset.

IGN reports that Matt Booty says the reset is now about 75 percent complete. The reorganization goes beyond layoffs: several studios and functions are being reassigned within Microsoft’s gaming division. The provided sources mention shifts including World’s Edge and Rare moving under Activision, Obsidian being placed under Bethesda, and Microsoft Casual Games moving to King.

The biggest content shift is that Activision will make the next Halo game with a new, dedicated team separate from Call of Duty. Halo Studios, formerly 343 Industries, would meanwhile keep a smaller support role for existing Halo games and community support. The sources do not mention a release date and do not yet provide details on the new team’s composition.

Separately, Kotaku also reports that Ninja Theory is entering consultation over a proposed closure after two sales deals reportedly fell through. That development is separate from the Halo restructuring, but it falls within the same broader Microsoft Gaming period of changes.

Timeline

2026-07: Microsoft/Xbox announces an earlier broader reset within its gaming division.
2026-07: Earlier reporting says Xbox had already cut 1,600 developers in a previous round.
2026-09-22: Kotaku reports that Xbox is cutting 268 jobs as part of the ongoing reset.
2026-09-22: Microsoft is said internally to have the Xbox restructuring about 75 percent complete.
2026-09-22: Activision is named as the developer of the next Halo game with a new team.
2026-09-22: Ninja Theory reportedly enters consultation over a proposed closure after failed sale talks.
2026-09-30: End of fiscal Q1, mentioned in one source as a relevant moment in the restructuring.

Background

This latest round is part of a longer reshaping of Microsoft Gaming. Earlier, Compulsion Games and Double Fine were made more independent within the Xbox structure, with their back catalogues and IPs moving with them. Undead Labs is also mentioned in the provided context as a studio that went through a similar transition.

The sources are not fully aligned on every detail about Halo, but the core picture is clear: Halo Studios is losing lead development on the next mainline Halo game and will mainly remain to support existing content. The exact size of the remaining teams and the schedule for Activision’s new Halo team have not been confirmed.

Sources

Kotaku: Xbox Lays Off 268 As 'Reset' Continues
Variety: Xbox Lay Offs Continue; Activision to Develop Next 'Halo' Game
IGN: Confirmed Microsoft Hands Halo to Call of Duty Developer Activision as Part of Huge Xbox Studios Shakeup