Microsoft is reshaping its approach to the beloved Halo franchise. Following the latest round of Xbox layoffs, Halo Studios—formerly known as 363 Studios—has seen its workforce reduced to approximately 30 employees. Reports indicate this diminished team will continue to support the existing Halo community and assist with other Xbox projects, while the responsibility for developing the next mainline Halo game has been handed over to Activision, the publisher behind Call of Duty.
According to sources, Halo Studios recently presented an updated vision for Halo 7 to Xbox executives. The proposed title was set to include a campaign, player-versus-player (PvP) and player-versus-environment (PvE) multiplayer modes, along with Forge—the iconic in-game creation tool that lets players build custom multiplayer maps and game modes. The studio was also reportedly exploring remakes of Halo 2 and Halo 3, as well as a standalone spinoff based on the novel First Strike. However, the layoffs have cast uncertainty over these projects.
Activision is forming a dedicated Halo team rather than redirecting resources from its existing Call of Duty studios. Activision president Rob Kostich stated, “For Halo, our goal is clear: make the greatest Halo game ever, worthy of its universe and legacy, while staying true to what made players love it in the first place. It is a bold ambition, one that this franchise deserves. We have already begun assembling a purpose-built team, unique in capability and talent, ready and excited to deliver this next chapter with the community.”
This strategic move marks a significant departure from the long-standing model where Halo Studios served as the franchise’s primary developer. For Microsoft, consolidating resources across fewer teams aligns with a broader restructuring of its AAA game development. Activision already coordinates multiple studios for Call of Duty, enabling large-scale projects to share production staff and resources—a blueprint that may now benefit Halo.
Xbox is similarly merging other development groups: Playground Games and Turn 10 now collaborate on Forza and Fable titles, while Bethesda has assumed a larger role in major projects. The Halo transition underscores Microsoft’s new focus on shared resources and flexible studio assignments, signaling that even its most iconic franchises may no longer remain confined to a single studio throughout their lifecycle.
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