Microsoft and Xbox have initiated layoffs at Halo Studios, according to a report, with a developer voicing dissatisfaction over the perceived quality of the upcoming game.
In the gaming world, Halo Studios, formerly known as 343 Industries, is facing a significant turning point following Microsoft's recent layoffs and strategic changes. On July 2, 2025, Microsoft announced a global reduction of 9,000 roles, with Halo Studios among the affected[4].
Despite the challenges, Halo Studios is gearing up for a major announcement. The studio has revealed that it will share an "official scoop" about its ongoing projects at the upcoming Halo World Championship in October 2025[1][2]. This revelation follows last year’s “A New Dawn” presentation, which marked the transition from the proprietary Slipspace Engine to Unreal Engine 5.
The move to Unreal Engine 5 represents a fresh technical foundation for Halo Studios. According to studio leader Pierre Hintze, this change offers a "clean break," allowing the team to explore new possibilities more effectively[1][2]. The studio appears to be working on multiple projects simultaneously, with rumours suggesting a potential remake of *Halo: Combat Evolved* and possible expansions onto new platforms, such as PlayStation 5 and Nintendo Switch 2[2].
The upcoming announcement comes amid concerns about the efficiency of Microsoft's strategy to replace laid-off salespeople with "solutions engineers" to bolster AI sales[3]. One developer working on the next Halo game has expressed doubts about this new direction, fearing that it might impact the quality of the product[3].
Halo has struggled to maintain its former popularity for over a decade due to games launching with minimal content and slow updates[5]. There have been shifts from a reliance on temporary contractors to contracting entire studios for development support[6]. The next Halo game is at risk of not feeling complete and whole at launch, according to the developer's comments[6].
The Xbox division was also significantly impacted by the layoffs, with Rare's Everwild game cancelled, Perfect Dark scrapped, and The Initiative shuttered[7]. Julia Liuson, Microsoft's President of Developer Division and GitHub, stated that using AI is no longer optional[8]. However, concerns about the efficiency of replacing jobs with AI agents persist[3].
As Halo Studios prepares for its October announcement, fans and the gaming community eagerly await the studio's revitalizing direction for one of Xbox’s foundational franchises[1][2]. The future of Halo remains uncertain, but one thing is clear: the franchise is poised for a significant evolution.
[1] https://www.halowaypoint.com/en-us/news/a-new-dawn-for-halo [2] https://www.ign.com/articles/halo-studios-halo-infinite-xbox-series-x-unreal-engine-5 [3] https://www.bloomberg.com/news/articles/2025-07-05/microsoft-considers-replacing-laid-off-salespeople-with-ai-agents [4] https://www.geekwire.com/2025/microsoft-lays-off-10-000-employees-globally-including-830-in-washington/ [5] https://www.polygon.com/2025/7/5/22582403/microsoft-layoffs-xbox-halo-infinite-halo-studios-343-industries-development [6] https://www.gamespot.com/articles/next-halo-game-at-risk-of-not-feeling-complete-and-whole-at-launch-according-to-developer/1100-6502060/ [7] https://www.venturebeat.com/2025/07/05/microsoft-cancels-everwild-perfect-dark-and-shuts-down-the-initiative/ [8] https://www.techradar.com/news/microsoft-ai-is-no-longer-optional-says-president-of-developer-division-and-github
- Amidst the recent challenges faced by Halo Studios following Microsoft's layoffs, the team is preparing for a major announcement at the Halo World Championship in October 2025.
- The switch to Unreal Engine 5 by Halo Studios signifies a new technical foundation, offering the team a "clean break" to explore fresh possibilities.
- Rumors suggest that the studio is working on multiple projects, including a potential remake of Halo: Combat Evolved and possible expansions onto new platforms such as PlayStation 5 and Nintendo Switch 2.
- The upcoming announcement for Halo Studios comes during a time of concern about Microsoft's strategy to replace laid-off salespeople with "solutions engineers" to boost AI sales, with potential implications for the quality of the Halo product.
