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

by Alex Co September 22, 2026 10:33 am in News
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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.

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.

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.

 

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Alex Co

Father, gamer, games media vet, writer of words, killer of noobs.



1 Comment
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Todd
Todd
19 days ago

They still need to close them! Halo Studios, The Coalition, Rare, Obsidian, InXile, Machine Games, and Arkane Studios. Bring back Vicarious Visions for remakes. Sony needs to follow and close down Sucker Punch, Bend Studio, San Diego, Team Asobi, Housemarque, Insomniac, Santa Monica, Naughty Dog, and Firesprite.

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