Halo Studios lived a short, utilitarian life – Microsoft used it to create the perfectly serviceable Halo: Campaign Evolved remake, and now the studio is effectively retired after 268 layoffs impacting it and other first-party Xbox developers. But it never had the opportunity to be anything more interesting.
Thus is the plight of Western gaming. Big corporations keep being impatient for results, so they move straight to relentless “restructuring.” That’s what’s happened here – Halo: Campaign Evolved was a fine remake, but it was not good enough to compete with the Call of Duties absorbing the modern FPS player’s time.
So we can only mourn Halo Studios’ recently summoned potential. Formerly known as 343 Industries, Halo Studios had been the guardian of Halo games for 20 years; Xbox established it in 2007, after Halo creator and former Microsoft baby Bungie went independent. Xbox then rebranded 343 as Halo Studios in 2024, saying in a press release at the time that the developer had new energy to produce more Halo “without distraction, without impediment, to create better games with players’ hopes and wishes at the heart of the endeavor.” … It didn’t last long.
Following September 22’s 268 layoffs, made in service of 3,200 total gory cuts to Xbox, Microsoft also shared that it was passing along the Halo franchise to Call of Duty publisher Activision. About the layoffs, Xbox writes in an announcement on its website, “We are reorganizing our studios. The goal is to strengthen our franchises and games by operating fewer business units, aligning groups that already work closely together, and focusing our publishing expertise.”
Basically, it’s going to let the behemoth that regularly ships billion-dollar Call of Duties handle Halo instead. Activision president Rob Kostich says the publisher wants 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. 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.”
While Xbox disclaims in its press release that “a small team at Halo Studios will continue supporting the Halo community and games in-market,” it seems like, for the most part, Activision is scraping off the old paint and starting again.
This is starting to sound like an old story – studio releases game, studio immediately undergoes mass layoffs no matter how much money it made, and whatever major corporation that owns it isn’t concerned with the layers of grime coating its reputation. Just this year, this sad story has applied to Battlefield 6 developers, Destiny 2 developers, Directive 8020 devs, Tomb Raider devs, and many more in an especially difficult year.
ASGC Games Industry Layoffs Tracker creator Amir Satvat, who recently spoke to Edge for a feature now available to read in the Knowledge newsletter, says, “I think this is as bad as the ’83 crash if you’re a game developer based in North America or western Europe, in a traditional triple-A studio.”
Notice that Satvat calls out Western developers in particular. The Japanese games industry has been triple-fortified from the storm of 2026 layoffs because, “They didn’t get swept up in the live-service trend, or into these mega-blockbusters with 500-person teams,” Satvat says. It probably helps, too, that they don’t pay their executives $38,649,984 like EA did for CEO Andrew Wilson despite all those Battlefield 6 layoffs.
Laid-off id Software producer Andrew Willis shared a similar observation about Japan’s brawny games industry in a recent interview with Kiwi Talkz, saying about Nintendo, “They’re feeding the tree fertilizer and water. Trimming, you know, where necessary, and just making sure that it will healthily produce fruit forever.”
“Our folks here,” Willis continues, “in the more Western game executive side, they’re just cutting it down. They want it now. And then they look around and they’re like, ‘Why aren’t there any apples?'” It’s almost as ridiculous as introducing Halo Studios and then firing everyone before they could make the next Halo.