Xbox Reorganizes Its Gaming Empire as Activision Takes Charge of the Next Halo

Microsoft is undertaking another major restructuring of its gaming division, transferring development of the next major Halo game to a newly formed team within Activision while cutting hundreds of jobs across Xbox’s studio network.

The changes, announced as part of Microsoft’s continuing Xbox reorganization, include 268 additional job cuts, the reassignment of several studios and a broader effort to consolidate the company’s gaming operations. The restructuring could significantly alter how some of Xbox’s most recognizable franchises are managed.

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Activision to lead development of the next Halo

Activision, best known for the Call of Duty franchise, is expected to develop the next mainline Halo game through a newly established team.

The move represents a shift in responsibility away from Halo Studios, the Microsoft-owned developer previously known as 343 Industries. According to reporting on the restructuring, Halo Studios will retain a smaller role focused on supporting existing titles, while the new Activision team takes charge of the upcoming major release.

Microsoft has not publicly provided a complete set of details about the new game’s storyline, release date or gameplay direction. Consequently, it remains too early to determine how the change in development leadership will affect the final product.

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Hundreds of Xbox positions eliminated

The latest restructuring includes 268 roles across Xbox Game Studios, with cuts affecting Halo Studios, other first-party studios and management and operational teams.

The job reductions follow earlier layoffs and studio changes within Microsoft’s gaming business. Reports indicate that the company is continuing a wider restructuring programme designed to reduce duplication, consolidate operations and change how its franchises are developed and published.

The layoffs have raised concerns among employees and players about the future of teams that have worked on major Xbox franchises.

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Wider changes across Microsoft’s studios

The reorganization extends beyond Halo. Several other studios and business units are being moved under different parts of Microsoft’s gaming structure.

These changes are part of a broader reorganization of Microsoft’s gaming assets, rather than a single isolated decision involving Halo.

What the change means for Halo Studios

Halo has historically been one of Xbox’s flagship properties. The franchise helped establish the original Xbox as a major console brand and has remained a central part of Microsoft’s gaming portfolio.

The decision to assign the next game to a new Activision team changes the franchise’s internal development structure. It also raises practical questions about how creative direction, technical development and oversight will be divided between the new team and the remaining Halo-focused staff.

The available reports do not establish whether the change will accelerate development, delay the game or alter its creative direction. Those outcomes will depend on the team’s composition, production plans and Microsoft’s future announcements.

Why Microsoft is restructuring Xbox

Microsoft’s latest changes come after a series of layoffs, studio closures, sales and internal reorganizations across its gaming operations.

The company has been seeking a more consolidated structure, with major franchises managed under fewer organizational groups. Reporting has linked the reset to efforts to simplify the business, focus resources on established properties and improve the commercial performance of its gaming operations.

The strategy reflects the increasing importance of large franchises such as Halo, Call of Duty, Minecraft and Candy Crush within Microsoft’s wider gaming business.

However, reducing the number of independent teams can also create uncertainty for employees, studio identities and creative decision-making.

Potential closure of Ninja Theory

One of the more serious developments in the restructuring concerns Ninja Theory, the studio behind Hellblade.

Reports say that efforts to sell the studio did not succeed, leaving it facing a possible closure. The situation illustrates the pressure on Microsoft to reconsider the ownership and operating structure of some of its development teams.

A proposed closure would have implications for employees and for the future of projects associated with the studio. The available reporting describes the closure as a possibility rather than a completed action.

What players should watch

Several issues will likely determine how the restructuring is received by the gaming community:

• The new Halo team’s creative direction: Whether Activision maintains the franchise’s established identity or introduces substantial changes.

• Development continuity: How responsibilities are divided between Activision’s new team and Halo Studios.

• Release plans: Whether Microsoft provides a confirmed timeline for the next major game.

• Employee impact: Whether further job reductions or studio changes follow.

• Xbox’s long-term structure: Whether the reorganization produces a more centralized gaming business or leads to additional changes.

Independent assessment

Microsoft’s decision to transfer the next major Halo game to an Activision-led team is a significant organizational change, particularly because Halo has long been closely associated with Xbox’s internal studios.

The move should not automatically be interpreted as evidence that the next game will succeed or fail. Its eventual quality will depend on development execution, creative leadership, production resources and the team’s ability to deliver a coherent experience.

What is clear is that the restructuring places major Xbox franchises under a more consolidated management system while employees across the gaming division face further job losses. The long-term effects on the workforce, studio independence and the identity of Xbox remain uncertain.

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