Halo Studios Faces Layoffs as Ninja Theory Shuts Down

Microsoft’s ongoing layoffs in its Xbox division have taken another turn, with chief content officer Matt Booty announcing on Tuesday that 268 employees will be let go from Halo Studios, various first-party studios, and the Xbox Games Studios management team. In a memo shared with Xbox staff, Booty detailed significant shifts within Microsoft’s gaming sector, including the transfer of the Halo franchise to Activision.

Booty also revealed plans to shut down Ninja Theory, the studio behind Hellblade. The implications for the recently announced sequel, Senua’s Saga: Hellblade 2, remain uncertain at this point.

Activision will now take charge of Rare and World’s Edge, the studio responsible for Age of Empires. Booty mentioned that Activision will also be developing the next Halo installment, which will be managed by a dedicated team distinct from the ongoing Call of Duty projects. A small group at Halo Studios will continue to support the Halo community and maintain existing games.

Booty noted that efforts to find a buyer for Ninja Theory did not succeed, leading Microsoft to initiate consultations with employees regarding the proposed closure while still exploring alternative options. Discussions with Arkane, the studio behind Dishonored and Blade, are ongoing and expected to continue until the year’s end.

These layoffs follow a previous round of cuts announced in July, when Xbox CEO Asha Sharma revealed plans to eliminate 1,600 jobs and reduce the workforce by a total of 3,200 over the coming year. This earlier wave of layoffs affected entire studios, including Double Fine Productions and Compulsion Games, which reverted to independent status, as well as Undead Labs and Ninja Theory, which were sold to undisclosed third parties.

The layoffs also impacted employees across various divisions, including Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and Xbox Game Studios.

Sharma highlighted the competitive landscape, stating, “We now find ourselves competing not only with the largest publishers but also with smaller independent studios. It is neither possible nor desirable to own every great independent studio.” She also committed to reducing management layers within Xbox to enhance collaboration across teams.

The latest round of layoffs reflects a long-standing history of mismanagement alongside recent overexpansion.