Microsoft Hands Halo Franchise to Activision in Major Xbox Restructuring
Redmond, Tuesday, 22 September 2026.
Microsoft has transferred development of the iconic Halo franchise to Activision while cutting 268 jobs, marking a significant strategic shift in Xbox’s ongoing corporate reorganization.
Franchise Transfer and Immediate Layoffs
On 2026-09-21, Microsoft (NASDAQ: MSFT) confirmed the transfer of the Halo franchise development to Activision, marking a pivotal shift in its gaming division’s operational structure [1][2]. This strategic move accompanies the elimination of 268 roles across Halo Studios, XGS management, and central functions, as verified by internal staff memos circulated on 2026-09-22 [3][4]. The newly assigned Activision team will be purpose-built and separate from ongoing Call of Duty operations, ensuring dedicated focus on the next mainline Halo title [1][2]. Meanwhile, the existing Halo Studios workforce will transition primarily into a supporting role for in-market games and community management [2][3].
Restructuring Progress and Financial Context
This latest round of layoffs contributes to a broader workforce reduction plan announced in July 2026, which targets a total of 3,200 employees to lower costs and streamline operations [1][4]. As of 2026-09-21, Xbox leadership reported that the restructuring process is approximately 75% complete, following previous divestitures and studio consolidations [1][3]. Based on the total target of 3,200 cuts, the remaining 25% of the restructuring plan implies approximately 800 positions may still be subject to elimination or transition before the financial year concludes [4]. Microsoft leadership cited poor financial results and collapsing profit margins as key drivers for this significant reorganization of the gaming business [1].
Studio Realignments and Future Operations
Beyond the Halo franchise, the restructuring extends oversight of World’s Edge (Age of Empires) and Rare (Sea of Thieves) under the Activision umbrella [2][4]. Matt Booty, Xbox Chief Content Officer, expressed gratitude to departing colleagues while emphasizing the necessity of these actions to optimize studio efficiencies following the company’s acquisition strategy [1][3]. Looking ahead, an ALL-XBOX team town hall is scheduled for 2026-10-06 to address further questions regarding the division’s direction [4]. Activision President Rob Kostich stated the goal is to create the greatest Halo game ever, worthy of its universe and legacy, with team assembly already underway [2][3].