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Activision moves Halo onto Call of Duty engine as Halo Studios cuts 268 jobs

Summary
Microsoft reassigned development of the next Halo title from Halo Studios to Activision.
Activision's new team is prototyping the project inside Sledgehammer Games.
Early builds reportedly run on the Infinity Ward Engine, Call of Duty's tech since 2005.
Halo Studios cut 268 jobs and now only maintains live titles like Halo: Campaign Evolved.
01

Shared engine infrastructure replaces studio-specific tech

Activision pitched separate multiplayer and campaign games before merging them into one package.
Prototyping now runs on the Infinity Ward Engine, used since Call of Duty 2.
That choice sidelines Unreal Engine 5 and ends Halo Studios' "expensive, proprietary" Slipstream engine.
"Please keep in mind that Activision's Halo project is in early development so things can change."
— Rebs Gaming, Halo and Xbox insider
02

Creative handover sidelines Halo Studios' legacy team

Nobody currently at Halo Studios is working on Activision's new Halo project, per Rebs Gaming.
"I'm told Activision's original idea for the campaign-only game prototype was a soft reboot that doesn't follow Halo Infinite's story but doesn't retcon any previously established canon."
— Rebs Gaming, Halo and Xbox insider
Halo Studios' final Canon Fodder blog revealed unreleased lore, including the Endless enemy faction.
Activision may disregard that work entirely under the new creative team.
03

Layoffs convert Halo Studios into a maintenance unit

Halo Studios, formerly 343 Industries, laid off 268 staff.
The remaining team only maintains live titles like Halo: Campaign Evolved.
Campaign Evolved had generated $67 million in gross revenue within its first two weeks.
The overhaul follows Xbox CEO Asha Sharma's "Xbox reset," which has driven layoffs and studio divestitures across the division.

What this means

For Publishers & Developers: Recruit displaced senior shooter developers now, before rival studios absorb the talent pool.
For Investors & VC: Discount valuations of studios whose moat rests on a bespoke in-house engine.
For Service Vendors: Pitch asset-conversion and engine-migration services to platform holders consolidating franchises onto shared tech.
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