Yesterday morning, Matt Booty, the CCO of Xbox, published an internal email/memo that was sent to Team Xbox employees globally. The contents of that email would send shockwaves through the gaming industry. Booty announced the elimination of 268 roles across Halo Studios, other first-party studios, XGS Management, and more. But buried within the restructuring was an announcement that would fundamentally change the future of Xbox’s founding franchise: Halo Studios would be relinquishing the Halo franchise to Activision.
The Details
Activision is Developing the Next Halo
- Xbox announced that Activision will take over development of the next Halo title.
- The project will be led by a new, purpose-built development team within Activision.
- Xbox says this team will operate separately from Activision’s ongoing Call of Duty development.
Activision Role Continues to Expand at Xbox
- Halo isn’t the only franchise affected by today’s restructuring.
- Xbox also announced that Activision will expand its remit to include World’s Edge and Rare.
- Other Xbox studios are also being reorganized, including the combination of Playground Games and Turn 10 around the Forza and Fable franchises.
Halo Studios isn’t Going Away
- Halo Studios will continue to exist, but its role is changing.
- According to Booty, a small team will remain at Halo Studios to support the existing Halo games and the Halo community.
- The studio will no longer lead development of the next mainline Halo title.
268 Employees are being Elimnated Acrosd Xbox
Xbox announced the elimination of 268 positions as part of its ongoing restructuring.
The cuts affect:
- Halo Studios
- Other first-party studios
- Xbox Game Studios management
- Central Xbox functions
Important: Xbox has not disclosed how many of the 268 positions came specifically from Halo Studios.
What we Don’t Know
There are Still A Lot of Questions
Xbox has confirmed the change in leadership for Halo development, but several details remain unknown.
We don’t yet know:
- Who will lead the new Activision Halo team
- How large the team will be
- What technology/engine it will use
- Whether existing Halo projects will continue unchanged
- How much of Halo Studios’ existing development work will transfer
- When the next Halo title will be revealed
For now, Xbox has only confirmed the organizational change.
The Bottom Line
Yesterday, a massive seismic shift occurred within Xbox as the company continues to restructure its game-development operations and address what has become an increasingly expensive development cycle.
Since Asha Sharma took over as head of Xbox, she has spoken openly about the challenges facing both her and the brand. She has emphasized the need to trim the fat, bring greater focus to Xbox’s game-development strategy, improve player retention, and position the company for the future. Sharma also warned that layoffs and restructuring would be necessary as Xbox works to address these challenges.
Xbox now finds itself at a critical point in its history. The company is facing significant financial pressures, making a fundamental shift in its business and development philosophy necessary if Xbox is to become a more sustainable asset for Microsoft.
Against that backdrop, this restructuring represents more than another round of layoffs or studio changes. It signals a broader attempt to reshape how Xbox develops, manages, and invests in its games. The success or failure of that strategy could have significant implications for the future of Xbox.