Microsoft cut 268 Xbox roles on Sept 22, 2026 and moved the next mainline Halo game to Activision, ending Halo Studios’ run as the franchise’s lead developer. The change is another round of the gaming reset Xbox announced in July, and it reshapes how Microsoft’s biggest first-party franchises are run.

What Happened

Chief content officer Matt Booty told staff on Sept 22, 2026 that 268 roles would be eliminated across Halo Studios, other first-party studios, and Xbox Game Studios management and central functions. The cuts extend the reset Xbox chief executive Asha Sharma laid out in July 2026: up to 3,200 positions, roughly 20 percent of the division, are slated to go during fiscal 2027. About 1,600 of those cuts were made in July.

What Changes for Halo

Activision will build the next mainline Halo game with a new, purpose-built team kept separate from Call of Duty development, per Booty’s memo and an Xbox Wire post. The game will be a brand-new mainline title. Halo Studios, formerly 343 Industries, is reduced to a small team supporting in-market games including Halo Infinite and Halo: Campaign Evolved. The same reorganization gives Activision oversight of Rare (Sea of Thieves) and World’s Edge (Age of Empires) and folds Obsidian into Bethesda.

Why It Matters

Halo is the franchise Xbox was built on, the game that defined Microsoft’s consoles since 2001. It now sits with the studio that makes Microsoft’s largest money-maker, Call of Duty. The move fits the strategy at the center of the reset: consolidate studios under fewer, larger teams instead of maintaining a wide network of first-party developers. The open question is whether a franchise handed to the Call of Duty house keeps its identity and its pull for Xbox.

The Ninja Theory Question

Two agreements to sell Hellblade developer Ninja Theory fell through, and Xbox now intends to close the Cambridge, England studio, Booty said. Under UK employment law, staff consultation has begun, and Xbox says it remains open to another buyer. As of Sept 22 the closure is signaled but not final, though the odds narrowed sharply once the second deal collapsed.

What to Watch

Watch for a Ninja Theory buyer during the consultation process, the first Activision-led Halo plans including platform and release timing, and the more than 1,300 reductions still expected through fiscal 2027. For leaders, the pattern matters more than the studio: Microsoft is trading a sprawling stable of studios for fewer, larger franchises managed by its biggest teams.