Microsoft’s latest Xbox restructuring reportedly claimed another casualty within the Halo franchise. According to a new report from The Verge’s Tom Warren, Halo Studios had another Halo project in development before Microsoft ultimately canceled it because the game was still several years away from being completed.
The report adds another layer to Microsoft’s decision to shift responsibility for the Halo franchise to Activision and establish a new team specifically dedicated to the series.
Development Was Reportedly Hit by Multiple Setbacks
Warren’s report claims the canceled Halo project had encountered several problems during development. An anonymous source cited in the report pointed to leadership changes, technological shifts, and layoffs as contributing factors that slowed the project down.
With the game reportedly still years from release, Microsoft apparently decided that continuing development was no longer viable as part of its broader Xbox restructuring.
The decision leaves Halo Studios in a significantly smaller role. Rather than leading the future of the franchise, the studio is reportedly expected to operate as a small team focused on supporting existing Halo games and maintaining the community.
Activision Takes Over Halo
The restructuring also moves stewardship of Halo to Activision, which is creating a dedicated team to work on the franchise.
Activision president Rob Kostich said the company wants to create “the greatest Halo game ever,” while emphasizing the importance of preserving the elements that originally made the franchise successful.
The move represents a major change for a franchise that has been under the direction of 343 Industries—and later Halo Studios—for nearly two decades.
A Major Shift for Halo Studios
Halo Studios was established in 2007 as 343 Industries after Bungie separated from Microsoft. The studio initially worked on Halo projects alongside Bungie before taking full responsibility for the franchise.
Its major releases included Halo 4, Halo: The Master Chief Collection, Halo 5: Guardians, and Halo Infinite. The studio was renamed Halo Studios in 2024 as Microsoft began shifting its approach to the franchise.
Its upcoming Halo: Campaign Evolved remake is currently the studio’s major announced project under the Halo Studios name.
The studio has faced significant criticism throughout its time overseeing the franchise, including the troubled launch of The Master Chief Collection and the reception to Halo 5: Guardians and Halo Infinite. The upcoming remake has also generated debate among fans over its design decisions and lack of traditional PvP content.
Xbox Continues Major Studio Restructuring
The changes surrounding Halo are part of a much larger restructuring across Xbox. Microsoft recently confirmed another round of layoffs affecting 268 positions, with Xbox chief content and studios officer Matt Booty saying the cuts included management and central functions.
Several studios and teams are also being reorganized.
Activision is taking responsibility for Halo, while also overseeing World’s Edge and Rare. Obsidian Entertainment is being placed under Bethesda and will continue development on its new Fallout project. Turn 10 is being combined with Playground Games, while Microsoft Casual Games is moving under King.
Microsoft has said the latest changes bring the company roughly three-quarters of the way through its previously announced restructuring.
For Halo, however, the biggest question now is what Activision’s new team ultimately delivers. With the franchise entering a new era of leadership, Microsoft appears to be taking a substantially different approach to the future of one of Xbox’s most recognizable properties.