The new studios will pump up the number of games available exclusively on Xbox, in a move addressing criticism that Microsoft has fallen behind its peers in launching innovative games for its console. Those games included "Battlefield 5" from Electronic Arts, "Fallout 76" from Bethesda Softworks and "Tom Clancy's The Division 2" from Ubisoft.
New games from Japanese developers were shown too - another surprise, that they were using Xbox's conference to make the reveal at all.
The trailer did not show any gameplay.
This week, Microsoft is in Los Angeles where the company announced that they acquired five gaming studios and that they are working on next-gen consoles as well as a new game streaming service.
The release of the game was announced at worldwide gaming event E3 in Los Angeles.
It is hard to deny the success of the PS4 and Sony, especially when compared to Microsoft and their Xbox One.
First off, by the numbers the Xbox One is the console that's lagging behind (tremendously so behind the PS4) and many have attributed this to a lack of solid exclusives.
The new studio is called The Initiative and is spearheaded by Darrell Gallagher, who has previously worked at Crystal Dynamics.
But this wasn't Microsoft's only big news.
E3 is the world's largest exhibition for the games industry, stuffed full of the latest and greatest games, consoles, and gaming hardware.
It's not clear how the game will play out - the teaser is extremely broad. Since that reveal, the studio head of 343 Industries' FPS projects, Chris Lee, confirmed that Halo Infinite will be a Master Chief story.
Last but by no means least, we got confirmation of a new Battletoads gaming coming in 2019 and two dollops of Sea of Thieves DLC on the way later this year.
Has EA learned their lessons about loot boxes?