- Microsoft is reportedly exploring whether Activision's Sledgehammer Games should take over Halo multiplayer development — a sign of how badly the franchise's internal studio is struggling.
- Sledgehammer built a basic prototype in June 2026, which was shelved in early July, and no project has been greenlit.
- The conversation about Sledgehammer's involvement is still very much alive, as confirmed by Windows Central editor Jez Corden and insider Rebs Gaming.
- Halo's original creator, Bungie, handed the series to 343 Industries (now Halo Studios) back in 2007 — so external development is nothing new for this franchise.
- Halo Infinite (2021) underdelivered, and a TV series flopped, leading to concerns about the franchise's future.
- Halo Studios reportedly laid off staff, including Campaign Evolved producer Nick Treitman, and abandoned multiple online-game concepts.
- The July 2026 remake Halo: Campaign Evolved sold around 1.2 million copies, generating roughly $67 million, below expectations.
Microsoft is reportedly exploring the possibility of outsourcing Halo multiplayer development to Activision's Sledgehammer Games, a move reflecting the struggles of Halo Studios (formerly 343 Industries).14
The discussions come after Halo Infinite (2021) underperformed, and the recent remake, Halo: Campaign Evolved, sold only 1.2 million copies, generating approximately $67 million—far below expectations.57
Sledgehammer Games, known for its successful Call of Duty titles, has been considered due to its expertise in live-service support and large-scale multiplayer development. Reports indicate that Sledgehammer built a basic prototype in June 2026, which was shelved in July, but the studio could return with a revised proposal.2
The restructuring aims to enhance the franchise's future, as Microsoft has discussed involving as many as 15 studios to expedite development and leverage specific strengths.
Despite the lack of official confirmation from Microsoft or Activision, the ongoing talks signal a potential shift in how Halo games are produced, with a focus on revitalizing the franchise's multiplayer experience.
“Whether Sledgehammer ends up involved or not, Microsoft appears ready to restructure how Halo gets made,” said industry insiders.
The franchise's original creator, Bungie, handed over control to 343 Industries in 2007, making external development a familiar concept for Halo.
“The idea, reportedly, is to outsource heavily so the company can move faster,” according to sources.
As the conversation continues, the future of Halo's multiplayer remains uncertain but is under serious consideration.
“Sledgehammer built a basic prototype in June 2026 but shelved it in early July, though insiders say the studio could return with a revised proposal. Halo: Campaign Evolved sold only 1.2 million copies, generating roughly $67 million, well below expectations, highlighting the franchise's struggles.”
gagadget.com
