As a result of a major restructuring within Xbox Studios, the next chapter of the Halo franchise will now be developed under the creative direction of Activision. This unprecedented handover has stirred unease among devoted fans, as it arrives amid widespread layoffs and organizational reshuffling within the company.
Significant Layoffs Accompany Activision’s New Role
Matt Booty, chief of Xbox Studios, revealed this week that Activision has been tasked with leading development on the upcoming Halo project. The work will be spearheaded by a new, dedicated team operating separately from the Call of Duty developers. The restructuring includes a reduction of the Halo Studios workforce by 268 employees, as part of extensive cuts across Xbox’s first-party and central studios. Despite these changes, Booty assured that a core group would continue to maintain and update Halo’s current titles and provide support for the player community.
The layoffs are part of a sweeping transformation that saw 1,600 positions eliminated earlier in the summer of 2026, with plans to shed an additional 1,600 jobs in the following year. Along with the transfer of Halo to Activision, Obsidian has been moved under Bethesda, while Rare and World’s Edge join the roster of properties now managed by Activision.
Fanbase Torn Over Franchise Direction and Potential Reset
The shift in stewardship has sparked lively—and sometimes heated—discussions in online communities about Activision’s possible move to “reboot” the Halo storyline, potentially rewriting or sidelining decades of established lore. Many long-term enthusiasts are concerned that a narrative overhaul could erase the universe they’ve grown to love. “Honestly that’s my biggest fear. I fear that they’ll just do a general reset on Halo’s established lore,” wrote one X (formerly Twitter) user, echoing widespread apprehension. Yet another fan countered, “Frankly I’m out if they DON’T do a semi-reboot and axe ALL of 343’s lore.” Others reflected on how the ending of Halo Infinite leaves room for fresh creative starts, seeing it as a “blank canvas.”
On Reddit, reactions range from dismissing a full reboot as “another terrible idea” to advocating for a partial reset that picks up after the end of Halo 3. The conversation illustrates the division in the community, with both excitement and trepidation present over the possibility of significant changes. “Halo has strayed too far from humanity while trying to make Chief human, ironically,” one gamer mused, capturing mixed feelings about the series’ evolution.
Status of Halo Fest and Official Communications
Alongside questions about the games themselves, the fate of Halo Fest Seattle—a live event set to commemorate the franchise’s 25th anniversary in December—has also come into question, particularly now that much of the original Halo Studios team has been affected by layoffs. Many fans remain uncertain whether the celebration will proceed, as Xbox has not provided any public updates about the event.
In an official message to Kotaku, Activision president Rob Kostich pledged to “make the greatest Halo game ever, worthy of its universe and legacy, while staying true to what made players love it in the first place.” Kostich refrained from clarifying whether changes to existing canon or lore should be anticipated, noting that the team responsible for the new game is still being assembled. Decisions about the franchise’s narrative direction, including the possibility of a reboot, remain pending for now.
A Major Turning Point for Halo’s Legacy
With these sweeping internal changes and the transfer of Halo’s future to Activision, Xbox’s iconic series embarks on a new and uncertain journey. The original development team has shrunk considerably, handing off principal duties as the industry watches closely for news about how the franchise will evolve. After the conclusion of Halo Infinite and its unresolved story, the pathway for Halo’s next era is open, but how its celebrated legacy will be honored or transformed remains to be seen.