Microsoft Taps Call of Duty Makers to Revive Struggling Halo Franchise

Microsoft's Halo franchise is struggling after several underperforming releases and TV shows. The company is exploring an unusual solution to turn things around: handing over multiplayer development to Activision's Sledgehammer Games, known for their work on Call of Duty.

The internal studio responsible for Halo, now called Halo Studios (formerly 343 Industries), has faced repeated setbacks in recent years. Despite the June 2026 release of a basic prototype built by Sledgehammer, no project has been greenlit yet.

Rebs Gaming claims that Halo Studios abandoned multiple online-game concepts and quietly shelved plans to remake Halo 2 and Halo 3. Campaign Evolved, released in July 2026, sold around 1.2 million copies, generating roughly $67 million, well below Microsoft's expectations.