Xbox has announced a major reorganization of its entire first-party studio ecosystem. Rare and World’s Edge will now operate under Activision Blizzard. The Call of Duty publisher is also taking stewardship of the Halo franchise.

This is a significant shift, with Rare and World’s Edge having previously operated under the Xbox Game Studios banner. This means that Activision Blizzard will assist Rare in steering the evolution of Sea of Thieves, and take command of the Age of Empires franchise moving forward.

The decision to move Halo to Activision is also something of a surprise. 343 Industries has overseen the Halo franchise ever since Bungie regained its independence from Microsoft in 2007, having shipped Halo: The Master Chief Collection, Halo 4, Halo 5: Guardians, and Halo Infinite. The team was rebranded to Halo Studios in 2024 as it sought to push the franchise in a new direction – the recently released Halo: Campaign Evolved serving as an example for how the series would function on Unreal Engine.

Activision president Rob Kostich said this of the change:

“We’re thrilled to welcome Halo, Rare, and World’s Edge to Activision. It’s an honor and a responsibility that we do not take lightly. These teams and their games have inspired fans around the world for decades.

“For Halo, our goal is clear: 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. It is a bold ambition, one that this franchise deserves. We have already begun assembling a purpose-built team, unique in capability and talent, ready and excited to deliver this next chapter with the community.

“To the World’s Edge and Rare teams, we can’t wait to get to work together.”

The 2026 remake of Combat Evolved is expected to be the only new title released by Halo Studios, with the group now operating in a support capacity for existing Halo games. The studio is expected to endure a substantial reduction in headcount as a result of the franchise control moving to Activision.

While Xbox is yet to make any further announcements regarding the next mainline Halo installment, a new team – rather than one of the studios responsible for keeping Call of Duty on its annual release cadence – will be put into place to steer its development. Matt Booty, Xbox’s chief content officer, has said in a statement that Activision’s Halo will be “led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty.”

In addition to these changes at Activision Blizzard, Xbox has also announced that Bethesda will begin managing Obsidian Entertainment (the two studios are already developing a new Fallout title), and that Playground Games (Forza Horizon) and Turn 10 (Forza Motorsport) will “come together as one studio” to help define the future of Forza, Fable, and the ForzaTech engine which powers both open-world games.

These big changes in the way that Xbox operates come as part of the broader Xbox Reset that CEO Asha Sharma and chief content officer Matt Booty announced earlier this year. Touted by Sharma as “the most significant restructure in Xbox history”, the reset has already led to over 1,600 redundancies and a divestiture with Compulsion Games, Double Fine, and Undead Labs as the group attempts to “return to growth” and streamline its content portfolio.

As a part of today’s news, Xbox announced a further 268 redundancies across the business. It also confirmed that Arkane (Marvel’s Blade) will remain in consultancy throughout the rest of the year, and that Ninja Theory (Senua) is facing the prospect of closure after two potential deals to secure its future fell through.