Xbox Reassigns Halo Development to Activision Amid Further Job Cuts

Xbox is making sweeping changes to the production of its flagship Halo franchise, announcing that Call of Duty publisher Activision will take on the development of any future games. This decision is part of a broader company-wide "reset" that has already seen hundreds of jobs cut.

Jez Corden of Windows Central described the shift in Halo development as a "dramatic move," while gaming analyst Christopher Dring questioned if it could help revive what was once Xbox's "crown jewel." Halo has been a key franchise for Xbox since the brand's entry into the console market in 2001, significantly contributing to Microsoft's standing in the industry.

Xbox stated that Halo Studios, which recently released "Halo: Campaign Evolved," will continue to support the game's existing community and work on current titles, rather than focusing on new releases. Rob Kostich, Activision's president, expressed a clear objective: "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 a purpose-built team at Activision is already being assembled for this next chapter.

Activision's expanded responsibilities will also include managing the World's Edge studio, responsible for the Age of Empires franchise, and the Rare studio, known for Sea of Thieves. This consolidation aims to streamline development and management across key Xbox franchises.

The move follows an announcement in July by Xbox CEO Asha Sharma detailing a plan for the "most significant restructure in Xbox history." This restructure initially involved 1,600 job cuts, with a total of 3,600 planned losses. The company indicated it is three-quarters of the way through this planned overhaul. Sharma had previously stated that Microsoft's gaming division had not been "healthy," citing that while platforms like Game Pass created value, their growth had not been rapid enough. She also pointed to rising computing and hardware costs as external pressures affecting the company.

In addition to the Halo development shift, Xbox confirmed consolidations among other studios. Bethesda, the developer behind the Elder Scrolls series, will expand its remit to include Obsidian, the studio behind Fallout: New Vegas. Furthermore, the studios responsible for Forza Horizon and Fable will be combined.

Questions also remain regarding the future of other Xbox studios, including Ninja Theory, the Cambridge-based developer behind the Hellblade games. Sharma had announced in July that Ninja Theory would be spun off, along with four other studios. However, attempts to find a buyer for Ninja Theory have failed, with "two separate agreements" falling through. The studio will now enter into a consultation process with employees regarding a proposed closure, though potential buyout talks are reportedly ongoing. Of the four other affected companies, three have returned to management, while consultations for Arcane are still underway.

Analysts have noted that while Halo was once considered Xbox's "crown jewel," this status has not held true for over a decade. Christopher Dring compared Halo's former importance to Xbox to that of Mario for Nintendo, attributing its decline to "years of mismanagement."