Microsoft Moves Halo Development to Activision in Major Xbox Restructuring

Microsoft is reorganizing its Xbox gaming division, resulting in the elimination of 268 jobs and the relocation of the next mainline Halo game to a new team under Activision. Matt Booty, Xbox’s executive vice president and chief content officer, disclosed these changes to employees via a memo titled “Continuing Our Reset.” The latest job cuts mark roughly three-quarters of the way through the restructuring announced by Xbox Gaming CEO Asha Sharma on July 6, 2026, which included the elimination of approximately 3,200 Xbox positions during fiscal year 2027.

The restructuring involves consolidating Xbox studios into four larger publishing units. Halo Studios, formerly known as 343 Industries, will transition from developing the next major Halo title to supporting existing Halo games and its community. Activision, known for publishing Call of Duty, will take over development of the upcoming Halo game through a newly established team, separate from the Call of Duty group.

Additionally, Rare, which created Sea of Thieves and Everwild, as well as World’s Edge, responsible for Age of Empires, will now operate under Activision.

Other changes include Bethesda, the studio behind Fallout and The Elder Scrolls, expanding its responsibilities to include Obsidian Entertainment, while Playground Games and Turn 10 Studios will combine forces to focus on the Forza and Fable franchises. Ninja Theory, the developer of Senua’s Saga: Hellblade II, may face closure after Microsoft’s unsuccessful attempts to sell the studio.

Undead Labs has also been divested as part of the restructuring. These changes aim to bolster Microsoft’s publishing operations and streamline resources around its key franchises.