Microsoft has a Halo problem.
343 Industries, the internal studio Microsoft created to make Halo games after parting ways with series creator Bungie, is in apparent disarray. A round of layoffs at Microsoft in January hit the studio hard. Recriminations followed, with former staff laying the blame for this — and for the perceived disappointment of Halo Infinite — at the door of “incompetent” leadership. It was reported that Joe Staten, a Bungie veteran drafted in to get Infinite back on track, was on his way out following the 2022 departure of several other leads, including studio head Bonnie Ross. It then became apparent that Halo franchise head Kiki Wolfkill had left too. Both the studio and Xbox chief Phil Spencer had to take the humiliating step of denying a rumor that 343 would no longer be working on Halo games directly, instead farming them out to third-party studios.
In late January, Bloomberg reporter Jason Schreier painted a picture of a studio “all but starting from scratch.” At least 95 people at the company had lost their jobs in the layoffs, including many key development staff. 343 will move from using its own Slipspace Engine — a point of pride for a developer that had always put its tech credentials to the fore — to Epic Games’ Unreal Engine 5. No new story content for Halo Infinite is being worked on, Bloomberg reported, while unreleased multiplayer modes languish with tech troubles, and external studio Certain Affinity works on a possible battle royale-style spinoff. Polygon has also heard from multiple sources about the shift to Unreal Engine 5, and the Certain Affinity game.
Behind all this is the story of Halo Infinite. The third mainline Halo game from 343, Infinite was released in late 2021 to a reasonably warm reception: It had transposed Halo’s trademark first-person shooter gameplay to an open-world setting without losing too much of what made it special, while the multiplayer mode, released separately as a stand-alone, free-to-play game, initially seemed to hit the mark. But the game had missed its target to launch alongside the Xbox Series consoles by a whole year. Microsoft blamed the delay on the COVID-19 pandemic, but it only took the decision to push it back after a disastrous demo of the game in the summer of 2020 was widely derided for its quality.
This demo was perhaps the first sign that Halo, as an enterprise, was in real trouble. As soon as you saw it, a delay to the game seemed inevitable, but somehow it was being presented to the public as the centerpiece of a Xbox’s yearly summer showcase, with a 2020 date still attached. It was baffling. Either 343 didn’t fully appreciate the problems with its own game, or Microsoft felt too beholden to the power the Halo brand has over Xbox fans to let go of it in a new console launch year, even when it might be actually harmful not to. Whichever it was, the relationship between Halo and the people making it appeared to have grown dysfunctional.
Wiser heads prevailed, and the game was salvaged — or was it? Halo Infinite was a good game in the isolated moment of its launch, but it was meant to extend far beyond that. Infinite was to be a live game platform that would last for at least a decade, which would be expanded rather than supplanted with sequels, not unlike Bungie’s Destiny (although it’s fair to point out that Bungie itself needed a fresh start with Destiny 2 to actually realize this plan).
It turned out that 343 and the Slipspace Engine were not up to the task. Features promised for launch were long delayed. Some, like the local co-op mode that had been a staple of Halo since the first game, were scrapped. Amid growing disquiet from the game’s community about the pace of updates, the game’s third multiplayer season has been delayed by months. The reports that no expansions for Infinite’s campaign are in production are the death knell for the original idea of Infinite as a persistent universe of Halo. It’s possible that the game’s free-to-play multiplayer side can be kept running, but season 3 will have to be brilliant, and accompanied by a rock-solid roadmap, to start winning back the trust it needs.
It’s not immediately obvious what Microsoft, and what remains of 343 Industries, should do next. A demoralized and downsized studio will need to knuckle down on the multiplayer roadmap while drawing fresh plans for the future of Halo on a new engine; it’s not clear it has the resources to do either, never mind both. The protestations of Spencer, Xbox Game Studios chief Matt Booty, and 343 Industries head Pierre Hintze that 343 remains central to Halo development were all carefully worded to allow for outside collaborations, like the reported partnership with Certain Affinity. It feels like these will be necessary, both in terms of resources, and in creative terms too: 343 could certainly use fresh perspectives on what Halo can be.
If it’s to serve as the guiding light, though, 343 will need its own, strongly held and carefully maintained vision for Halo. And there’s an argument that this is exactly what it’s been missing from the start.
343 was created as a caretaker studio for Halo after Bungie split from Microsoft, deciding it had had enough of the franchise hamster wheel. Safely cocooned within the Microsoft campus at Redmond, 343 was part of the mothership; it couldn’t happen again. Microsoft hired a lot of very talented people to work there, but the studio had no identity, and no purpose beyond servicing someone else’s creation. Even its name was an Easter egg (343 Guilty Spark is a memorable AI character from Halo: Combat Evolved).
It was a recipe for proficient cover versions that somehow missed the point. Halo 4 was an impressive technical showcase for Xbox 360, but a rather empty game. Halo 5 married a fun multiplayer suite to a campaign of seemingly free-associated sci-fi cliche that had next to nothing to do with what fans understood Halo to be. Infinite strained hard to re-create the look and feel of classic Halo, and then put those elements in a box that was the wrong shape (and hadn’t been taped together properly).
The truth is that, setting aside the striking iconography of Master Chief’s mirrored visor and the arcing ringworlds, Halo’s soul resided deep in Bungie’s code: the weight and recoil of the weapons, the whack of the melee, the floating jump, the elastic, looping combat encounters. Bungie took those secrets with it when it left. All those identifying marks can more readily be found in Destiny than in 343’s Halo games. Asking another team to re-create that magic is like tasking a developer outside of Nintendo HQ with making a Mario platformer — it’s never going to feel right. Forming a Bungie cover band was a thankless task, and the fault for Halo’s current parlous state lies more with Microsoft for this misconceived plan than with any of the individuals that have worked at 343.
If the rumors that smaller-scale Halo narrative projects are being outsourced to other studios are untrue, perhaps Microsoft should think about whether it might not be a good idea after all. Recapturing the Bungie magic is impossible, so it becomes necessary to think about what else Halo might be. Studios with their own strong identities might have distinctive takes on Halo that could cut through 20 years of mythmaking and fan service and redefine it, similar to Konami’s intriguing plans to bring back Silent Hill.
For one of gaming’s most beloved series, and the flagship Xbox franchise, what has happened to Halo Infinite and 343 Industries is a drastic failure. The roots of that failure go all the way back to 343’s founding in 2007. The studio can rebuild, and build a new future for Halo, but it will need help — and to be given the opportunity to discover its own identity at last.