In the same day that rumours first surfaced, Microsoft on Tuesday confirmed that it will close Ensemble Studios after the release of Halo Wars.

"The team at Ensemble has made invaluable contributions to the games industry with their Age of Empires and Age of Mythology games and with the highly anticipated release of Halo Wars," Microsoft said in a statement. "This decision does not reflect at all on Ensembles talent or the quality of Halo Wars – in fact, many people who have had a chance to test drive Halo Wars agree that it is on track to being a fantastic game."

Although Ensemble will no longer exist after Halo Wars' release next spring, key members from the studio will form a new development team to work on new projects for Microsoft Game Studios and continue to support Halo Wars post-launch, Microsoft said.

"This was a fiscally rooted decision that keeps MGS on its growth path," the statement added. "While the decision to dissolve Ensemble was not an easy one, Microsoft is working to place as many Ensemble employees who do not move to the newly formed studio into open positions within Microsoft as possible."

The news comes as several publishers have begun consolidation efforts to combat the rising cost of video game development. Last year, Activision merged with Blizzard Entertainment, while EA has been courting Take-Two in a buy-out bid.