The future of Halo is being developed with Unreal Engine 5.

Microsoft has decided to move the development of the Halo franchise to the Unreal Engine 5, following more than a year of speculation regarding an engine change linked to a management restructuring at 343 Industries, as well as layoffs and other significant changes. In this context, 343 Industries will transform into Halo Studios as part of this announcement, with the intention of opening a new chapter in the Halo story.

The migration to Unreal Engine 5 represents the first step towards a profound transformation at Halo Studios, which will encompass technology, structure, processes, and even the studio’s culture. Pierre Hintze, the studio director, indicated that the aim is not only to improve development efficiency but also to radically change the way Halo games are created.

The team responsible for Halo's development will abandon the Slipspace Engine, a proprietary engine built for Halo Infinite that has proven problematic and hindered development progress. With several team members dedicated to developing this engine, parts of it are nearly 25 years old. Chris Matthews, art director of Halo Studios, commented that one of the main goals is to expand and enrich the Halo universe, allowing players to engage with a richer experience. According to Matthews, Unreal's rendering and lighting technologies, like Nanite and Lumen, offer unique opportunities that have not been seen before in the industry.

While Halo Studios has not revealed any release dates or announcements regarding new Halo games, the team has been developing gameplay samples in Unreal, under the name Project Foundry. This project is not considered a complete game or a technical demo, but rather a research, development, and training tool that will serve as the foundation for the new direction in Halo game creation.

Project Foundry has been designed as if it were a commercial title, with the intention that much of what is showcased can be incorporated into future Halo games. Hintze mentioned that most of the elements presented in Foundry are expected to be integrated into current or upcoming projects. This project includes more detailed landscapes for Halo's biomes and levels of vegetation that have not been seen in previous installments. Additionally, Master Chief's armor has been remodeled in this new representation, in a context where it has been revealed that Microsoft was working on a remaster of Halo: Combat Evolved.

Halo Studios is currently working on multiple Halo projects, while the Slipspace Engine will continue to be used for Halo Infinite. Hintze added that the previous approach, focused on providing the conditions for the success of Halo Infinite, was disproportionate. The transition to Unreal will allow the team to concentrate on creating new experiences of the highest possible quality.