Halo is staying with 343 Industries, but there are big changes coming.
A tall person in heavy green futuristic military armor, wearing a similar green helmet with gold visor, and has a gun strapped to their back is looking at a blue hologram of a woman.

After Microsoft announced plans to layoff 10,000 employees, many of which are coming from Xbox studios, the fate of the Halo franchise lingered in limbo. It was initially rumored that main Halo developer, 343 Industries, would be made into a support studio and that other studios would take on main development of future Halo titles.

343 Industries had to make a statement that refutes those claims. In a short Twitter statement, the development studio said that they "will continue to develop Halo now and in the future." Even with this word that they would continue to develop Halo, Bloomberg reports that there are some major changes involving 343's plans for the future of Halo.

First off, Halo will ditch the Slipspace engine in favor of Unreal Engine. Slipspace was in development for roughly three years and was used in just one title, Halo Infinite. Developers working with Slipspace faced several challenges as a result of the engine itself due to it being built off of older engines and code that date back as far as the 1990s. These difficulties have reportedly held back at least two new multiplayer modes for Halo Infinite: Extraction and Assault.

At several points over the past decade, management at 343 debated switching to Epic Games Inc.’s popular Unreal Engine. But it wasn’t until late last year, when previous studio head Bonnie Ross and engine lead David Berger departed and Pierre Hintze took over, that the firm finally decided to pivot to Unreal.
The engine change will reportedly begin with a new Halo project codenamed Tatanka. Tatanka has been rumored for a little while now and is in co-development at 343 Industries and Certain Affinity. This project began as a Halo battle royale but may now go in a different direction. Tatanka and future Halo titles will use Unreal Engine.

Another unfortunate bit of news here is that there is no new story content coming for Halo Infinite's campaign. 343 Industry developers had spent the better part of a year working with prototypes in Unreal Engine while also pitching ideas for entirely new games. Many of the developers at 343 working on these projects were laid off.

Prior to its release, Microsoft said that Halo Infinite would be "the start of the next ten years for Halo." Those plans have very obviously changed.