Xbox is cutting hundreds of jobs and making sweeping changes to the production of its flagship Halo franchise, as its company-wide “reset” continues.

Its latest reductions, forming part of a wave of ongoing layoffs, will impact staff at the studio which currently makes Halo – with Call of Duty publisher Activision to take on development of any future games.

Jez Corden of Windows Central said the change was a “dramatic move”, while gaming analyst Christopher Dring said it raised questions over whether it could help revive what was once Xbox’s “crown jewel”.

It comes as questions also mount over the future of other notable Xbox studios, including Cambridge-based game developer Ninja Theory.

Xbox chief executive Asha Sharma said in July the Bafta-winning studio behind the Hellblade games would be spun off, alongside four others, amid its dramatic downsizing.

But Matt Booty, chief content officer at Xbox, wrote in a blog post on Tuesday, external that attempts to find a buyer for the studio had failed – with “two separate agreements” falling through.

He said Ninja Theory would now enter into consultation with employees on a proposed closure, though potential buyout talks are continuing.

Of the four other affected companies, three have now returned to management, while consultation for Arcane remains “under way”, Booty added.

Xbox’s announcement of a further 268 cut jobs comes after Sharma revealed in July that the company was “beginning the most significant restructure in Xbox history”.

It saw 1,600 jobs cut immediately, amid 3,600 planned losses overall.

The company says it is three quarters of the way through its planned restructure.

Sharma said, external at the time that the Microsoft’s gaming division had not been “healthy” and while platforms like its subscription plan Game Pass had “created meaningful value”, they had not grown quickly enough.

In an interview with the BBC in August, she also pointed to the “crisis” in rising computing prices and hardware costs as another external pressure on the company.

Halo has been a hallmark of the Xbox brand since Microsoft’s first entry into the console market in 2001, helping establish the firm as a major player in the industry.

Xbox said on Tuesday that Halo Studios, which recently released Halo: Campaign Evolved in July, would continue to support the game’s community and work on existing games, as opposed to focusing on any new release.

Christopher Dring, editor-in-chief and co-founder of The Game Business, said the military sci-fi shooter was once Xbox’s “crown jewel” but that hadn’t been the case “for more than a decade”.

“Halo was once to Xbox what Mario is to Nintendo,” said Corden, “but years of mismanagement have eroded that”.

Dring said bringing Halo under Activision’s leadership “makes sense”, though the company would be “mindful not to lose what makes Halo unique”.

“For Halo, our goal is clear: make the greatest Halo game ever, worthy of its universe and legacy, while staying true to what made players love it in the first place” said Rob Kostich, Activision’s president.

“We have already begun assembling a purpose-built team, unique in capability and talent, ready and excited to deliver this next chapter with the community.”

As well as leading any new Halo game development, Xbox said Activision’s remit would expand to manage the World’s Edge studio, home to the Age of Empires franchise, as well as the studio Rare and its series Sea of Thieves.

The PlayStation rival also confirmed consolidations of some of its current companies – saying Elder Scroll-makers Bethesda would “expand its remit” to include Fallout New Vegas-makers Obsidian, and combining the studios behind Forza Horizon and Fable.

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