Sunday 4 October 2026
Afternoon EditionRSS
ZOTPAPER

News without the noise

ZOTPAPER
Business

Microsoft Shakes Up Xbox: Activision Takes Over Halo as 268 Employees Laid Off

Halo Studios continues support duties, but next flagship Halo game will come from Activision. Ninja Theory likely closed.

By LineZotpaper
Published
Updated
Read Time2 min
Sources2 outlets
Microsoft is announcing a major restructuring of its Xbox gaming division, handing control of the Halo, Sea of Thieves, and Age of Empires franchises to Activision while laying off approximately 268 employees. Halo Studios will continue supporting existing titles, but the next flagship Halo installment will be developed by Activision. The changes follow earlier layoffs of 1,600 Xbox employees and the sale of several studios earlier this year.

The restructuring marks a significant shift in Microsoft's game development strategy. Halo Studios, the longtime home of the iconic sci-fi shooter franchise, will be significantly impacted. While the studio will continue to support current titles such as Halo Infinite and the recent Halo: Campaign Evolved, development of the next major Halo game will move to Activision, the Call of Duty publisher Microsoft acquired in 2023.

Microsoft is also likely closing Ninja Theory, the studio behind Hellblade and Senua's Saga, as part of the layoffs. The cuts affect around 268 employees across the Xbox organization. The moves follow a broader cost-cutting effort that saw 1,600 Xbox staff laid off and several studios sold off earlier in 2026.

The restructuring positions Activision to take on a broader role within Microsoft's gaming portfolio beyond its traditional Call of Duty and Overwatch franchises. Sea of Thieves, Rare's popular pirate adventure, and Age of Empires, the long-running strategy series, will also move under Activision's management.

§

Analysis

Why This Matters

  • Franchise future: Halo has been a flagship Xbox brand since 2001; moving its development to Activision signals a major strategic shift for Microsoft's gaming division.
  • Studio stability: The layoffs and likely closure of Ninja Theory raise concerns about Microsoft's commitment to its first-party studios after significant recent cuts.
  • Consumer impact: Players may see a change in creative direction for Halo and other beloved series as Activision's development pipeline takes over.

Background

Microsoft completed its acquisition of Activision Blizzard in 2023 after a lengthy regulatory battle. Since then, the company has undergone several rounds of layoffs across its gaming divisions, including 1,600 Xbox employees earlier in 2026. The current restructuring appears to consolidate key franchises under Activision, which has a proven track record with annual blockbuster releases but has faced criticism over development crunch and quality control.

Key Perspectives

Microsoft: By moving flagship franchises to Activision, Microsoft leverages a studio known for large-scale, cross-platform game development and a strong live-service model. This could streamline production and reduce overhead. Activision: Taking on Halo, Sea of Thieves, and Age of Empires expands Activision's portfolio beyond its existing IPs, potentially increasing its influence within Microsoft's games division. Fans and skeptics: Many Halo fans are uneasy about handing the series to a studio best known for Call of Duty. Concerns include potential homogenization of Halo's gameplay and narrative identity. The likely closure of Ninja Theory also draws criticism over Microsoft's handling of acquired talent.

What to Watch

  • Halo's next flagship: Quality and style of the upcoming Activision-developed Halo game will be a key indicator of the new direction.
  • Ninja Theory's fate: Official confirmation or denial of closure; any potential studio transfers.
  • Further restructuring: Additional layoffs or studio changes as Microsoft continues to integrate Activision into its broader gaming operations.

Sources

Zotpaper

Written by software from the reporting listed above, scored by an automated standards desk, and published without a person reading it first. If something here is wrong, tell the editor and it will be put right.

How we workReport an errorSubscribe