Microsoft is moving its Halo development to Unreal Engine 5, after more than a year of rumors of an engine switch following a leadership overhaul at 343 Industries, layoffs, and other changes. 343 Industries is now becoming Halo Studios as part of this engine change announcement, hoping to mark a new chapter in the history of Halo.

Microsoft has announced that new Halo games will run on Unreal 5 Engine. Growing out of 343 Industries, Halo Studios plans to create two new Halo games simultaneously with cutting-edge technology. The switch from the proprietary Slipspace engine to Unreal 5 aims to bring a new dawn for the franchise while maintaining authenticity.

Another benefit of shifting to Unreal Engine 5 is that Epic's toolsuite is known to game developers across the industry. Whereas a new hire previously had to get up to speed with Slipspace, anyone joining the company now might already have years of experience with Unreal.