Xbox is making one of its biggest first-party changes in years, and Halo is at the center of it.
Microsoft confirmed on September 22 that Activision will develop the next Halo title through a new, purpose-built team. The group will be separate from Activision’s ongoing Call of Duty development, while a smaller team at Halo Studios will continue supporting the existing Halo community and games already on the market.
The move is part of a wider Xbox restructuring that also affects Rare, Obsidian, Playground Games, Turn 10, Ninja Theory and other teams. Xbox says it is eliminating 268 roles across Halo Studios, other first-party studios, and management and central functions.
Activision is taking on the next Halo game
The most immediate change for players is the future of Halo. In an internal message published publicly by Xbox, Microsoft Gaming president Matt Booty said Activision will develop the next Halo title with a dedicated team built specifically for the project.
That distinction matters. This is not simply the Call of Duty team being moved onto Halo. Xbox says the new Halo group is separate from Activision’s ongoing Call of Duty development and plans.
Halo Studios is not disappearing entirely. A smaller team will remain in place to support the Halo community and the franchise’s existing games. Xbox has not used this announcement to reveal the next game’s name, release date, platforms, campaign structure or multiplayer plans, so those details remain unconfirmed.
Rare and World’s Edge are also moving under Activision
Activision’s role inside Xbox is expanding beyond Halo. Microsoft says the publisher will also oversee Rare and World’s Edge.
Rare is best known for franchises including Sea of Thieves, while World’s Edge leads Microsoft’s Age of Empires efforts. Xbox did not announce cancellations or new release plans for those studios in the restructuring message.
Obsidian is moving under Bethesda
Another major change puts Obsidian under Bethesda’s expanded remit. Xbox says Obsidian will continue its current projects, including Grounded, while also working on a new Fallout project in collaboration with Bethesda Game Studios.
That confirmation is notable because it ties the Fallout franchise to another established Xbox RPG studio, but Microsoft did not provide a title, release window or additional gameplay details for the project.
Playground Games and Turn 10 are becoming one studio
Xbox is also combining Playground Games and Turn 10 into a single studio focused on the Forza and Fable franchises.
The two teams have worked around the Forza brand for years from different sides of the series. Playground is associated with Forza Horizon and is also developing Fable, while Turn 10 is the studio behind Forza Motorsport. Microsoft describes the change as formally bringing long-time creative and franchise partners into one team.
Ninja Theory faces a proposed closure
The restructuring also brings uncertainty for Ninja Theory. Xbox says two separate agreements to sell the studio fell through. Microsoft is beginning consultation with employees on a proposed closure while continuing to explore other options.
That wording is important: Xbox has not said Ninja Theory is already closed. The process is still described as a consultation, with other paths still being explored.
Microsoft also says consultation with Arkane remains underway and is expected to continue through the end of 2026.
Undead Labs leaves Xbox, but State of Decay 3 remains on Game Pass
Undead Labs has successfully transitioned out of Xbox ownership on terms similar to earlier divestitures involving Compulsion Games and Double Fine. According to Xbox, Undead Labs will release State of Decay 3 with a new publisher, and the game is still planned to arrive on Game Pass on day one.
Xbox did not announce a new release date for State of Decay 3 as part of the restructuring update.
What the Xbox reset means for players
For now, the clearest player-facing change is Halo. One of Microsoft’s most recognizable franchises will have a new development structure under Activision, while Halo Studios shifts to a smaller support role for existing games and the community.
The broader reorganization also puts several major Xbox franchises under fewer business units. Forza and Fable will sit within the combined Playground-Turn 10 studio, Obsidian moves under Bethesda, and Activision gains oversight of Rare and World’s Edge in addition to its new Halo team.
There are still major unanswered questions, especially around the next Halo game. Xbox has confirmed who will develop it, but not what the game is, when it will arrive or how it will build on the series.
For a wider look at what is already confirmed for Microsoft’s console, see isGamer’s upcoming Xbox Series X games tracker.
Source: Xbox Wire’s official September 22 restructuring announcement.
