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Xbox cuts 268 roles and hands the next Halo game to Activision

Xbox says a new Activision team, separate from Call of Duty development, will make the next Halo. A small Halo Studios team will keep supporting existing games and the community.

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TLDR

In a September 22, 2026, memo published by Xbox Wire, Xbox’s Matt Booty announced 268 job cuts across Halo Studios, other first-party studios, and Xbox Game Studios management and central functions. He said Activision will develop the next Halo with a new team separate from Call of Duty. The memo also outlines moves for Rare and World’s Edge under Activision, and Obsidian under Bethesda, where it will continue its current projects. Separately, the BBC, citing Booty, reports that Ninja Theory will enter employee consultation on a proposed closure after two sale agreements fell through, though potential buyout talks continue.

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Activision will develop the next Halo game as part of a broad restructuring of Xbox studios, according to an internal memo from Xbox chief content officer Matt Booty published by The Verge. The new Halo team will be separate from the teams working on Call of Duty, while a smaller group at Halo Studios will continue supporting games already on the market.

Booty said the change is intended to strengthen Xbox’s franchises by combining groups that already work closely together and operating fewer business units. The memo names 268 eliminated roles across Halo Studios, other first-party studios, and Xbox management and central functions.

A new home for several Xbox franchises

The reorganization broadens Activision’s remit beyond Call of Duty. Rare, the team behind Sea of Thieves, and World’s Edge, which oversees Age of Empires, will move under Activision. The memo also places Obsidian with Bethesda, while Microsoft Casual Games moves from Bethesda to King. Playground Games and Turn 10 Studios are being combined around Forza and Fable.

The plan leaves Halo Studios with a narrower role than it has held since taking over the franchise from Bungie. Booty’s memo says a small team will support the Halo community and in-market games, while the next flagship release shifts to the newly formed Activision team. The company did not announce a title, release window or detailed development plan for that game.

The restructuring also has consequences outside the reporting lines. Booty said two proposed agreements to sell Ninja Theory fell through and Microsoft will begin consultation with employees on a proposed closure, while continuing to explore other paths. That is not a completed shutdown, but it underscores how the reset is reshaping the Xbox organization as well as its franchise ownership.