Xbox moves Halo to Activision and redraws its studio map after another round of cuts

A studio map redrawn

On 22 September 2026, Microsoft's Xbox division cut 268 roles across Halo Studios and moved several of its best known first-party teams under Activision Blizzard King, the publisher it bought in 2023. It was the clearest sign yet that Xbox's future runs through Call of Duty rather than around it.

The next Halo will be developed under Activision, Xbox chief content officer Matt Booty said in September, while Halo Studios keeps supporting existing games. Rare, the maker of Sea of Thieves, and World's Edge, the team behind Age of Empires, also moved under Activision Blizzard King.

Elsewhere in the reorganisation, Turn 10 Studios and Playground Games were merged into a single studio focused on the Forza and Fable franchises. Reporting on the September round put the cut at 268 roles across Halo Studios.

A year of cuts

The September round did not come out of nowhere. In July 2026 Microsoft said it would lay off 1,600 Xbox employees immediately and a further 1,600 over the following year. In that same wave Double Fine and Compulsion Games were returned to independent status, while Undead Labs and Ninja Theory were sold off.

The leadership had already changed. Phil Spencer, the long-serving face of Xbox, departed in February 2026 alongside Sarah Bond, and Asha Sharma took over as head of Xbox. The plan has been staged in phases across the 2027 fiscal year rather than delivered in a single announcement, which is part of why each new wave lands as its own shock.

The September reshuffle went wider than Halo. Reporting on the restructure had Bethesda absorbing Obsidian and King, the mobile studio behind Candy Crush, taking on Microsoft's casual games. Read together with the earlier sales of Undead Labs and Ninja Theory, it describes a portfolio being sorted into a few big engines and a long tail of teams that no longer fit.

Betting on the Activision engine

Folding first-party studios under Activision Blizzard King is a strategic statement, not just a cost move. Activision runs the biggest annual franchise in the business and the machinery that ships it to tens of millions of players every year. Putting Halo, Rare and World's Edge inside that structure signals a shift away from a broad portfolio of prestige studios and toward a smaller number of franchises run at industrial scale.

It also fits the direction Xbox has taken since the Activision deal closed: releasing former exclusives on rival platforms, leaning on Game Pass, and treating hardware as one route to players rather than the only one. For the teams caught in the reshuffle, the cost is measured in jobs and in the loss of studio identities that took years to build. Halo, once the reason people bought an Xbox, is now a franchise handed to the Call of Duty publisher to steward.