Microsoft Taps Activision to Develop Next Halo Game; Studio Mergers Announced

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Three months ago, Xbox CEO Asha Sharma announced a “reset” of Xbox that people knew meant layoffs. Today, that reset continues, and it’s a mixed bag.

For starters. the Halo franchise is now being developed by one of Activision’s studios, as the corporate side of Xbox seems to want to have a tighter circle of studios.

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Other studios merged include Obsidian, Turn 10, and more.

Xbox Reset Continues With Studio Mergers

Xbox’s announcement of the reset continuing meant a cull of 268 roles at Halo Studios, “other first-party studios, and the XGS management and central functions layer.”

This also meant a reorganization of the studios under the Xbox family, with the goal to strengthen franchise’s and games by operating fewer business units, aligning groups.

• Activision will expand its remit to World’s Edge, as well as Rare. Activision will also be developing the next Halo title, led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty. A small team at Halo Studios will continue supporting the Halo community and games in-market.
• Bethesda will expand its remit to include Obsidian, which will continue its current projects, including Grounded, as well as the new Fallout project made in collaboration with Bethesda Game Studios.
• King will expand its remit to include Microsoft Casual Games, uniting our two global leaders in casual game design and live operations.
• Playground and Turn 10 will come together as one studio focused on the Forza and Fable franchises. These two studios have been creative and franchise partners for over a decade, and today’s changes will formally move their work into one team.

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A follow-up on Ninja Theory and Arkane have also been revealed.

“Third, an update on our studio divestitures: In August, Compulsion and Double Fine returned to management with their IP, back catalogs, and runway funding. Undead Labs has now successfully transitioned on similar terms and, with a new publisher, will release State of Decay 3 day one on Game Pass. Unfortunately, two separate agreements for Ninja Theory fell through. We will now begin consultation with employees on a proposed closure while continuing to explore other paths forward. Consultation with Arkane remains underway and is expected to continue through the end of the year,” per Xbox’s Matt Booty.

From a business standpoint, the moves do make sense, though it’s a hard pill to swallow for people losing their jobs.

RELATED Rumor: Sony Reportedly Reconsidering Delaying Digital-Only Plans Due to Xbox Pushing for "100% Physical" Strategy for Project Helix Much has been said about Sony's announcement that they are pulling back from physical game releases for PlayStation on January 2028.