Microsoft has announced one of the most significant changes to the structure of its Xbox studios in years. Activision will develop the next Halo title through a new team created specifically for the franchise, while Halo Studios will retain a smaller group focused on supporting games already on the market and the Halo community.

The reorganization goes far beyond Master Chief. Rare and World's Edge are also moving under Activision's expanded structure, Bethesda is extending its remit to include Obsidian, and Microsoft is consolidating other parts of its game development operation.

At the same time, the company confirmed that 268 roles are being eliminated across Halo Studios, other first-party studios, and Xbox Game Studios management and central functions.

Activision will develop the next Halo

For players, the biggest development concerns the future of Halo. According to Xbox's announcement, Activision will develop the next title in the series with a purpose-built team that is separate from ongoing Call of Duty development and plans.

Master Chief in a gameplay scene from Halo: Campaign Evolved

That distinction matters. The announcement does not mean the Call of Duty development team is simply being reassigned to make Halo. Microsoft is describing a dedicated team operating within Activision's new structure.

Halo Studios, formerly known as 343 Industries, is not disappearing from the equation entirely. A smaller team will continue supporting the Halo community and games currently on the market.

The change comes only months after the release of Halo: Campaign Evolved, the Halo Studios-developed remake of Halo: Combat Evolved that launched on July 28, 2026.

A historic shift for Halo

Halo is deeply connected to Xbox's identity. The franchise helped establish Microsoft's original console and remained one of the company's defining properties across multiple generations.

For years, primary development of the franchise was associated with 343 Industries, which later became Halo Studios. Putting a new Activision team in charge of the next major project therefore represents a substantial change in how Microsoft manages one of its most recognizable gaming properties.

Master Chief fighting Covenant forces in Halo: Campaign Evolved

Microsoft has not announced the name, release date, platforms or gameplay details for the next Halo title. There is also no factual basis for assuming Halo will adopt Call of Duty mechanics or systems simply because the project will be developed under Activision.

What is confirmed is the organizational shift and the creation of a dedicated team for the next game.

Rare and Age of Empires also move into the new structure

The restructuring extends beyond Halo. Activision is also expanding its remit to include Rare and World's Edge.

Rare is associated with franchises including Sea of Thieves, while World's Edge oversees Age of Empires. The move places several long-standing Xbox properties within a larger organization led by Activision.

Microsoft says the reorganization is intended to reduce the number of separate business units, align groups that already work closely together and focus publishing expertise.

Bethesda expands its remit to Obsidian

Another significant change involves Bethesda and Obsidian Entertainment. Bethesda will expand its structure to include Obsidian, which will continue working on its existing projects, including Grounded, as well as a new Fallout project being developed in collaboration with Bethesda Game Studios.

The move formally brings two groups with important connections across Microsoft's RPG portfolio closer together.

Playground and Turn 10 are being brought together

The restructuring also affects the teams behind Forza. Playground Games and Turn 10, historically associated with Forza Horizon and Forza Motorsport respectively, are being consolidated into a single organization.

According to information released about the restructuring, the combined organization will continue working on Forza Horizon and Fable.

It is another example of Xbox Game Studios moving more of its development teams into larger organizational groups.

Microsoft eliminates another 268 Xbox roles

The restructuring also carries a significant human cost. Microsoft confirmed that 268 roles are being eliminated across Halo Studios, other first-party studios, and Xbox Game Studios management and central functions.

The company says actions completed since July, including studio divestitures, put it roughly three quarters of the way through its previously announced restructuring.

The cuts arrive as part of a broader transformation of Xbox and affect employees working across different areas of game development and management.

What happens to Halo now?

In the short term, Halo: Campaign Evolved remains the franchise's current release. The remake rebuilds the original Halo: Combat Evolved campaign while adding new material, including three additional missions.

Master Chief exploring the Halo ringworld in Halo: Campaign Evolved

Today's announcement concerns the next Halo title. Until Microsoft or Activision reveals that project, major questions remain unanswered: what kind of game it will be, when it will arrive and how the new team intends to approach the franchise.

The firm conclusion for now is that Microsoft is substantially changing the organizational structure behind several of Xbox's most important franchises.

For Halo, that marks the beginning of an unprecedented phase: its next major chapter will be developed by a new team under Activision while Halo Studios takes a smaller role supporting existing titles.