"Good luck today, Halo friends": After years of rivalry, Call of Duty's creators have taken charge of Xbox's defining FPS series amid yet more layoffs

Halo Studios now a support studio for existing Halo games

For decades, Halo developers have resisted the influence of the vastly better-selling Call of Duty shooters. Now, the makers of Call of Duty own Halo. As part of Microsoft's on-going axing-down of their Xbox gaming business, the company have placed Bungie's old FPS in the hands of Activision, while making layoffs at erstwhile series custodian Halo Studios and demoting the latter to a support studio for existing Halo games.

As revealed by Xbox chief creative officer in an Xbox Newswire article cheerily titled "continuing our reset", Microsoft are laying off 268 people "across Halo Studios, other first-party studios, and the XGS management and central functions layer". It's not yet clear exactly who is affected. The news follows the announcement of plans to get rid of 1600 staff in July, alongside a brace of studio divestitures and closures – back then, Microsoft said that they hoped to cut their workforce down by 3200 people in total over their next financial year.

As part of the latest round of reductions, Xbox are merging several studios and reallocating projects. In the case of Activision, Booty says that they're now making the next Halo game, "led by a new, purpose-built team that is separate from ongoing development and plans for Call of Duty". Meanwhile, "a small team at Halo Studios will continue supporting the Halo community and games in-market".

Formerly known as 343 Industries, Halo Studios were founded in 2007 to take charge of the series after creators Bungie regained their independence from Microsoft. Over the years, they've developed and collaborated on a mixture of remaster projects and spin-offs, including Halo: The Master Chief Collection, alongside the full sequels Halo 4, Halo 5: Guardians and Halo Infinite.

343 Industries were renamed in 2024 to signal a new start for Halo, albeit one marked by yet another remake project, with development shifting from the proprietary Slipspace Engine to Unreal Engine 5. But then came several waves of colossal Microsoft reductions, in the wake of the Covid lockdown gaming boom. The studio's recent Halo: Campaign Evolved doesn't appear to have found much of a following, though Microsoft have yet to release full sales figures.

Booty's care about differentiating Halo's development under Activision from Call of Duty's development suggests that he is anticipating angry responses from Halo players for whom Call of Duty is the Devil incarnate. The two shooters are very different, historically: Call of Duty is defined by ADS, multiplayer progression, and smallscale infantry combat, whereas Halo is more of a sandbox with vehicles, a longer time-to-kill, and a preference for on-map gadgets.

Call of Duty's overwhelming commercial success has motivated or obliged successive generations of Halo developers to borrow more and more ideas from the Activision FPS, but even the recent Halo: Infinite feels like a very different beast to the latest Call of Duty. I haven't played Halo for years, partly because I've joined the BDS boycott on Microsoft in light of their Israeli military connections, but I find it bizarre to think of Halo operating under Call of Duty's roof.

Still, all of that's only of armchair-designerly interest, next to the fact that a bunch of people are losing their livelihoods. Messages of support for Halo Studios employees have begun appearing from other game developers on LinkedIn, including a call to arms from former 343 art director Glenn Israel, who left in October 2025. Israel has previously accused "senior Halo representatives" of driving him out, noting that company "restructuring" is an opportunity for bosses to settle scores with troublesome employees. In a message to Halo developers affected by today's events, he writes "you are not alone and I have resources to share." Former Halo Studios senior software development engineer Bill Rosas comments more simply, "good luck today, Halo friends".

Solidarity with everybody affected. As regards Xbox's on-going efforts to "reset" the biz by throwing all the game-laying chickens away and stuffing the remaining eggs into a decreasing quantity of baskets, Julian has notes. "Xbox may think they're activating synergies across the portfolio setting themselves up for some great growth momentum next quarter," he writes, "but I just see a ball of mashed up Chewits."