Microsoft Evaluated Activision's Sledgehammer Games for a Halo Multiplayer Title

Halo is at a crossroads. A new report from well-known insider Rebs Gaming, corroborated by multiple outlets including IGN and Insider Gaming, reveals that Microsoft recently evaluated having Activision's Sledgehammer Games — the Call of Duty studio — develop a multiplayer-focused Halo title. The report also details the heavy outsourcing behind the recently released Halo: Campaign Evolved, the cancellation of a Sledgehammer prototype, and broader strategic shifts at Xbox.

Microsoft Evaluated Sledgehammer Games for a Halo Multiplayer Title

According to Rebs Gaming, Xbox explored a proposition where Activision would help Halo Studios produce new Halo games, with Sledgehammer Games specifically contributing to a multiplayer experience . This was reportedly at an early, high-level stage, and no project was formally greenlit . Leveraging Sledgehammer's expertise in the shooter space would be a major departure for a franchise historically developed entirely in-house or by 343 Industries/Halo Studios .

The Prototype Was Built... and Canceled

Rebs Gaming reports that an early prototype for this proposed Sledgehammer-led Halo multiplayer game was built around June 2026, testing basic elements like character movement . However, the prototype was reportedly canceled in early July 2026 . Multiple sources note that despite the cancellation, negotiations between Microsoft and Activision may not have completely ceased, and Microsoft may still be exploring the broader partnership for future Halo work .

Halo: Campaign Evolved Was Heavily Outsourced to 15 Studios

Simultaneously, Rebs Gaming reported that Halo: Campaign Evolved, the recently released Unreal Engine 5 remake of the original Halo: Combat Evolved, was built using a massive network of external partners. The game's credits list approximately 15 external co-development studios, including :

• Virtuos
• Keywords Studios (and its subsidiaries Sparosoft and Snowden)
• Skybox Labs
• Arrival, FX Chamber, Devoted, Digic, and Sprung Studios

Windows Central reported that a source said, "A lot of outsourcing was used to create Campaign Evolved, even for core programming and design" . This marked a significant operational shift for Halo Studios (formerly 343 Industries), which relied on external partners for a large portion of the remake's development . Halo Studios head Pierre Hintze reportedly intended to outsource as much development as possible, according to developers cited in the report .

Troubled Pipeline Killed Standalone Multiplayer Game Project Ekur

Insider Rebs Gaming also revealed that the troubled development pipeline on Campaign Evolved — including technical difficulties with the Unreal Engine 5 transition, management problems, and scrapped work — directly contributed to the cancellation of Halo Studios' own standalone multiplayer project, codenamed Project Ekur . Polygon reported that developers from the Project Ekur team were moved to work on Campaign Evolved to address its crisis . IGN noted the studio "burned through external partners, scrapped large amounts of in-progress work, and pushed the campaign team into crunch in the final year" .

Broader Implications for Xbox's Management of Halo

Taken together, the Rebs Gaming report signals a strategic reassessment at Xbox:

• Outsourcing is becoming the norm. Halo Studios is increasingly leaning on external co-development partners for future projects rather than building everything in-house .
• Cross-studio experimentation. Microsoft is willing to involve Activision studios (post-acquisition) in Halo development, a major departure from the franchise's historical insularity .
• Unreal Engine 5 pipeline struggles. The troubled UE5 transition at Halo Studios directly impacted both Campaign Evolved and the cancellation of Project Ekur and the Sledgehammer prototype .
• No clear internal direction yet. The on-again, off-again nature of these multiplayer pitches suggests Xbox is still searching for the right structure and leadership model for the franchise's future .