Xbox Hands Halo to the Call of Duty Maker, Cuts 268 More Jobs, and Moves Toward Closing Ninja Theory

Microsoft’s “reset” of Xbox has reached the part where the org chart gets redrawn. The Bungie-born franchise that defined Xbox now belongs to the studio that makes Call of Duty.

In a memo republished on Xbox Wire, Xbox chief content officer Matt Booty confirmed another 268 layoffs spanning Halo Studios, other first-party teams, and the Xbox Game Studios management and central functions layer. Booty said the division is now roughly three-quarters of the way through the restructuring it announced in July.

Activision is developing the next Halo game with a new, purpose-built team, while a small Halo Studios contingent keeps supporting Halo titles already on the market. Rare and World’s Edge have also moved under Activision. Obsidian now sits under Bethesda, continuing projects like Grounded and a new Fallout title made with Bethesda Game Studios, and King absorbs Microsoft Casual Games. Playground Games and Turn 10 are merging into a single studio focused on Forza and Fable.

Then there are the divestitures. Undead Labs has left Xbox on terms similar to Double Fine’s and, with a new publisher, will still release State of Decay 3 day one on Game Pass. Ninja Theory wasn’t as lucky. After two separate agreements for the Hellblade developer collapsed, Xbox will begin consultation on a proposed closure while still exploring other options. Consultation with Arkane continues. We first reported that Ninja Theory was on the chopping block back in June, weeks before the first wave of layoffs made the reset official.

For PC players, the line that should sting most is about World’s Edge. Creative director Adam Isgreen says just under half of the Age of Empires studio was laid off in this round (Ed: Does anyone else call it Ants or Elephants besides me?). Age of Empires is about as PC-native as a Microsoft franchise gets, and it now reports to a publisher built around annual console shooters.

Our take: consolidating Halo under Activision is an admission that Halo Studios couldn’t ship the next game on its own. Whether a Call of Duty-adjacent team understands what makes Halo feel like Halo is the whole question. Hellblade II was one of the best-looking games on PC, and losing the team that made it is the part of this reset that’s hardest to defend.

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