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Activision to Build Next Halo Game as Xbox Cuts 268 More Jobs

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Xbox hands future Halo development to Call of Duty maker Activision and cuts 268 more jobs, as Ninja Theory faces closure after two sale deals collapse.

Microsoft's Xbox is handing development of future Halo games to Activision, the publisher behind Call of Duty, while cutting a further 268 jobs as part of a company-wide overhaul. The shift moves one of the brand's most recognisable franchises away from the studio that currently makes it, and comes on top of layoffs that will affect staff at that team.

Matt Booty, Xbox's chief content officer, confirmed the changes in a blog post on Tuesday. Halo Studios, which released Halo: Campaign Evolved in July, will now stay focused on supporting the community and maintaining existing titles rather than building a new entry. Any future Halo game will be led by Activision instead.

Rob Kostich, Activision's president, said the aim was to "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." He added that the publisher had already started pulling together what he described as a purpose-built team of talent to work on the next chapter alongside the game's community.

The latest cuts extend a restructuring that Xbox chief executive Asha Sharma announced in July, describing it as the largest reorganisation the division has ever attempted. That plan involved 1,600 immediate job losses out of 3,600 planned overall. Xbox says it is now three-quarters of the way through the process.

Sharma said at the time that Microsoft's gaming arm had not been in good shape. She noted that products such as the Game Pass subscription service had generated real value but had not expanded fast enough. In an August interview, she also pointed to steep increases in computing and hardware costs as an outside strain on the business.

The reshuffle has also thrown the future of other Xbox studios into doubt. Cambridge-based Ninja Theory, the Bafta-winning team behind the Hellblade series, was among five studios Sharma said in July would be spun off. Booty wrote on Tuesday that efforts to sell Ninja Theory had collapsed, with two separate agreements falling apart.

As a result, Ninja Theory will begin a consultation with its employees over a proposed closure, though Booty said talks with potential buyers were still ongoing. Of the four other studios affected, three have returned to management control, while a consultation involving Arcane remains in progress.

Halo has been tied to the Xbox identity since Microsoft entered the console market in 2001, and helped turn the company into a serious force in gaming. Industry figures were divided on what the change means. Jez Corden of Windows Central called it a "dramatic move," adding that Halo was "once to Xbox what Mario is to Nintendo" but that "years of mismanagement have eroded that."

Christopher Dring, editor-in-chief and co-founder of The Game Business, said the military science-fiction shooter had been Xbox's "crown jewel" but that this had not been true "for more than a decade." He said placing Halo under Activision "makes sense," while cautioning that the publisher would need to be careful "not to lose what makes Halo unique."

Keywords: Halo, Activision, Xbox layoffs, Halo Studios, Ninja Theory, Microsoft gaming, Rob Kostich, Call of Duty

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