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.

Halo moving to Unreal Engine 5 is being positioned as the first step of a transformation for Halo Studios to change its technology, structure, processes, and even culture. “We’re not just going to try improve the efficiency of development, but change the recipe of how we make Halo games,” says Pierre Hintze, studio head at Halo Studios.

The team building Halo will move from the studio’s Slipspace Engine to Unreal, after the proprietary engine it built for Halo Infinite became difficult to use and strained development. Halo Studios has had to dedicate a lot of staff to developing the Slipspace Engine, and parts of it are almost 25 years old.

“One of the primary things we’re interested in is growing and expanding our world so players have more to interact with and more to experience,” says Chris Matthews, art director at Halo Studios. “Nanite and Lumen [Unreal’s rendering and lighting technologies] offer us an opportunity to do that in a way that the industry hasn’t seen before. As artists, it’s incredibly exciting to do that work.”

Halo Studios isn’t committing to any release dates or new Halo game announcements just yet, but the team has been building some examples of Halo running in Unreal. Dubbed Project Foundry, the work is “neither a game nor a tech demo,” but more of a research, development, and training tool. It’s also the foundation for how the studio is changing up the way it builds Halo games.

Project Foundry has been built as if it was a shipping game so that a bunch of it can appear in Halo games in the future. “It’s fair to say that our intent is that the majority of what we showcased in Foundry is expected to be in projects which we are building, or future projects,” says Hintze.

Project Foundry includes more detailed landscapes for Halo biomes, as well as foliage levels we haven’t seen in Halo games in the past. Master Chief’s armor has even been remodeled in this footage, months after I exclusively revealed in Notepad that Microsoft was working on some form of a Halo: Combat Evolved remaster.

Halo Studios is now working on multiple Halo games, while the Slipstream Engine will continue to power Halo Infinite. “We had a disproportionate focus on trying to create the conditions to be successful in servicing Halo Infinite,” says Hintze. “[But switching to Unreal] allows us to put all the focus on making multiple new experiences at the highest quality possible.”