Halo Studios has reportedly been reduced to a tiny fraction of its former workforce following Microsoft’s latest round of Xbox layoffs, while Activision has officially been handed responsibility for developing the next major Halo game.
Microsoft confirmed on September 22 that another 268 positions are being eliminated across Halo Studios, other first-party Xbox studios, and Xbox Game Studios management and central functions. The company says these latest changes bring its previously announced restructuring process roughly three-quarters of the way toward completion.
For Halo Studios, however, the situation appears particularly severe.
Halo Studios Could Be Down to Around 20 People
Microsoft has not publicly disclosed exactly how many employees remain at Halo Studios.
However, reports circulating within the Halo community claim that the studio may have been reduced to around 20 employees following the latest cuts.
The figure reportedly originated from a professional Halo player and content creator before being amplified by Halo-focused accounts including TechnicalHalo.
Because Microsoft has not confirmed the number, the approximately 20-person figure should currently be treated as an unverified report rather than an official staffing count.
What Microsoft has confirmed is that only a small team will remain at Halo Studios.
That team will focus on supporting the Halo community and games already on the market rather than leading development of the franchise’s next major installment.
That alone represents an enormous change for the studio formerly known as 343 Industries.
Activision Is Taking Over the Next Halo
The biggest confirmed development is that Activision will develop the next Halo title.
Microsoft says a new, purpose-built development team will be created under Activision specifically for Halo. Importantly, this team will operate separately from Activision’s ongoing Call of Duty development.
This means Activision isn’t simply handing Halo to one of the existing Call of Duty teams.
Instead, Microsoft appears to be building a dedicated Halo development group within Activision while leaving the remaining Halo Studios staff responsible for existing games and community support.
It effectively ends Halo Studios’ position as the primary developer responsible for Microsoft’s flagship shooter franchise.
Halo Championship Series Team Reportedly Hit
The restructuring may also extend beyond traditional game development.
Reports from within the Halo community claim that members of the team responsible for hosting the Halo Championship Series, better known as HCS, were also affected by the layoffs.
Microsoft has not provided a detailed breakdown of which individual teams or positions were eliminated.
That leaves major questions surrounding the future structure of competitive Halo.
HCS has remained an important part of Halo’s community throughout the Halo Infinite era, so significant reductions to the people operating it could potentially affect how Microsoft approaches competitive Halo going forward.
For now, however, the long-term future of HCS remains unclear.
Could Activision Completely Reboot Halo?
There has also been speculation that Activision’s takeover could eventually lead to a much larger creative reset.
Some community discussions have suggested Halo’s storyline, lore, or overall universe could potentially be rebooted under its new development structure.
There is currently no official confirmation that Microsoft or Activision plans to reboot Halo’s story.
Until either company announces otherwise, claims surrounding a complete lore reboot remain speculation.
Still, moving development of the next flagship Halo game away from the studio that has controlled the franchise since Bungie’s departure makes almost anything possible.
Activision’s new Halo team could continue existing storylines, soft-reboot certain elements, or take the series in an entirely different direction.
Activision Has Plenty on Its Plate
Fans expecting immediate answers about the future of Halo may have to wait.
Activision is currently preparing for the October 23 launch of Call of Duty: Modern Warfare 4, making Call of Duty the company’s most immediate major release.
Microsoft specifically says Halo will receive its own purpose-built team, but establishing that operation and revealing its first project could take time.
The next major Halo announcement may therefore be some distance away.
Rare and World’s Edge Are Moving Under Activision Too
Halo isn’t the only major Xbox property affected by Microsoft’s restructuring.
Activision is also expanding its responsibilities to include Rare and World’s Edge.
Rare is responsible for Sea of Thieves, while World’s Edge oversees the Age of Empires franchise.
Microsoft’s goal appears to be reducing the number of independently operating business units within Xbox and consolidating development and publishing responsibilities under larger organizations.
The full impact on employees at Rare and World’s Edge remains unclear.
Xbox’s Massive Restructuring Continues
The September layoffs are another chapter in a much larger transformation happening throughout Xbox.
Microsoft previously announced plans to eliminate approximately 3,200 positions across its gaming operations during the restructuring process.
With the latest 268 eliminated roles and previous studio changes included, Microsoft says it is now roughly three-quarters of the way through that process.
Other studios have taken very different paths.
Double Fine and Compulsion Games were separated from Microsoft and returned to independent management while retaining their respective intellectual property, back catalogs, and runway funding.
Undead Labs has now transitioned under similar terms and will continue development of State of Decay 3 with a new publisher.
Ninja Theory faces a considerably darker future.
Microsoft confirmed that two attempts to reach agreements surrounding the studio fell through. The company has subsequently begun employee consultations over a proposed closure of Ninja Theory, although Microsoft says it continues to explore other possibilities.
Halo Studios May Exist Mostly in Name
If reports that Halo Studios has been reduced to around 20 employees are accurate, Microsoft’s latest restructuring has fundamentally changed what the studio actually is.
This is no longer simply another round of layoffs at the developer formerly known as 343 Industries.
The next major Halo game is officially moving elsewhere.
Activision is building a dedicated team to develop it, while the remaining Halo Studios operation will primarily support existing games and the community.
Halo Studios isn’t officially dead.
But the studio that once carried responsibility for one of Xbox’s most important franchises has been reduced to a supporting role while Activision prepares to determine what comes next.
For Halo, this could mark the beginning of its biggest development shake-up since Bungie left the franchise behind.
