Halo Studios was reportedly still years away from shipping its next major Halo game before Microsoft canceled the project and handed development of the franchise’s next entry to Activision. The detail comes from The Verge’s Tom Warren, who says a source familiar with the situation described the Halo Studios project as years from completion after a prolonged period of leadership changes, layoffs and technical shifts. Microsoft has confirmed that Activision is now developing the next Halo title, but it has not publicly discussed the canceled Halo Studios project.
Warren reports that Microsoft chose not to move the existing Halo Studios development team directly under Activision. Instead, most of the studio has been cut back, with a smaller group remaining to support existing Halo games including Halo Infinite and Halo: Campaign Evolved. Microsoft then created a separate, purpose-built team under Activision to handle the franchise’s next game as part of its broader Xbox restructuring and Halo development shift.
The reported cancellation helps explain why Microsoft opted for such a significant reset rather than simply reorganizing Halo Studios under a new publishing structure. According to Warren, the next game being years away from release contributed to the decision to pull the plug. The report does not identify the canceled project’s title, scope, setting or development stage, and Microsoft has not said whether any technology, assets or design work will carry into Activision’s game.
Halo Studios had already undergone several major changes before the latest restructuring. The developer, formerly known as 343 Industries, shifted future Halo production to Unreal Engine and publicly showed technology demonstrations under the Project Foundry banner in 2024. It subsequently developed Halo: Campaign Evolved, the 2026 remake of the original Halo campaign that launched in July across Xbox Series X|S, PC and PlayStation 5.
Campaign Evolved remains separate from the newly announced Activision project. Microsoft’s September 22 restructuring announcement says Activision’s Halo game will be led by a newly formed team that is separate from ongoing Call of Duty development. The company has not revealed a title, release window, platforms or gameplay details for that project.
Reporting from The Hollywood Reporter has added one important detail about Activision’s plans, describing the next Halo as a full-featured mainline installment rather than another remake or smaller side project. Microsoft itself has not confirmed that characterization, so the scope remains based on reporting from sources familiar with the project. Activision has nevertheless described taking responsibility for Halo as both an honor and a significant responsibility.
The move also changes the role of Halo Studios after years of being Microsoft’s dedicated home for the franchise. Rather than leading the next major entry, the remaining team is expected to focus on Halo’s existing community and currently released games. That represents one of the largest structural changes to Halo development since Bungie stopped making the series more than a decade ago.
Microsoft’s decision comes amid a wider attempt to streamline Xbox’s first-party development operations. Rare and World’s Edge are also moving under Activision, Obsidian is being placed under Bethesda, and Turn 10 is merging with Playground Games. The company is simultaneously cutting hundreds of positions as part of a larger restructuring program announced earlier in the year.
The timing of Activision’s new Halo remains unknown. Although the canceled Halo Studios project was reportedly years away, there is no indication that Activision’s replacement will arrive sooner, particularly because Microsoft describes the new team as purpose-built rather than an existing Call of Duty studio simply taking over development. For now, the clearest change is that Halo Studios’ planned next game has reportedly been abandoned, while the franchise’s future mainline development is starting again under Activision.
