They are either negotiating with Microsoft to avoid closure, or trying to break away from Xbox Game Studios.

Jason Schreier, editor at Bloomberg, reported, citing sources familiar with the company’s plans, that several studios within Xbox are actively negotiating to break away from the company in order to avoid closure. These include Compulsion Games, Double Fine Productions, and Ninja Theory. The Verge also cites sources who say that Ninja Theory employees were informed yesterday that the studio would be shut down, although the studio hopes to find a buyer. Ninja Theory announced its new game, Senua, earlier this month during the Xbox Game Showcase. Kotaku also reported yesterday that Xbox plans to close Compulsion Games, but later updated the story with a note saying that the studio’s leadership is in talks with Xbox, without disclosing the details.

Although the studios may have the option to buy themselves back and operate independently, Schreier says the move could still lead to significant layoffs. On Bluesky, Schreier added that Compulsion Games, Double Fine Productions, and Ninja Theory are not the only studios facing the threat of closure, and that the layoffs are not planned until after Microsoft closes its fiscal year on June 30. Last week, Asha Sharma, CEO of Xbox, published a letter titled Next 100 Days: Xbox Reset, in which she alluded to upcoming layoffs as the company plans a reset in order to build a stronger Xbox, something we have already covered in the news. Sharma noted that costs are rising because of ongoing component shortages, and that the company’s current studio network has become overextended. Perhaps it should not have acquired ZeniMax Media and Activision Blizzard King then.

Yesterday, Craig Duncan, head of Xbox Game Studios, also announced that he is stepping down. According to Bloomberg, Duncan made his decision last week, directly before the planned layoffs.

Source: Gematsu, Bloomberg, The Verge, Kotaku, Bluesky, Bluesky