Xbox is reportedly preparing to close or sell at least three of its studios – Double Fine, Ninja Theory and Compulsion Games. The Verge And bloomberg On Monday.
Ninja Theory employees were informed on Monday that the studio would be closing The VergeBut the team is trying to find a buyer who can keep them going. Ninja Theory is the studio behind the Hellblade series and it was recently shown off at the Xbox Summer Game Fest Showcase, revealing a new entry coming in 2027.
Double Fine is the renowned studio behind the Psychonauts games, brutal Legend, broken era, keeper and all kinds of LucasArts Adventures, founded in 2000 by Tim Schafer and friends. Bloomberg said Double Fine leaders are in active talks to buy back Xbox itself rather than shut it down entirely.
According to the report, Compulsion Games is also in a similar situation. Compulsion is the Montreal studio behind the uber-stylish games Difference, we happy few And south of midnightThe latter part of which came out in April 2025.
bloomberg It is reported that several other studios under the Xbox Game Studios banner are also in talks over their future and are at risk of closure. As it officially stands, the Xbox Game Studios umbrella covers dozens of studios including Arkane, Bethesda, Halo Studios, id Software, Obsidian, Playground Games, ZeniMax, and Activision Blizzard King. We’ve contacted Xbox for clarification on the reported closure and buyout talks.
Microsoft’s modern game-Studio acquisition spree began in 2018 with the purchase of Undead Labs, Playground Games, Ninja Theory, and Compulsion Games, as well as the formation of The Initiative. This momentum continued to grow at an alarming pace in 2020 and 2021, when Xbox acquired eight more studios under ZeniMax Media, including Arkane, Bethesda, and id. Everything came to a head in 2022 with the announcement that Xbox planned to buy Activision Blizzard for $69 billion, the largest acquisition in video game history. The deal finally closed in late 2023 after a long battle with regulators.
Since the acquisition, Microsoft has made several large-scale layoffs in its gaming division, affecting thousands of employees, and has also closed well-known studios including The Initiative. Unfortunately, Double Fine, Ninja Theory, Compulsion, and other at-risk Xbox studios are in good company.
Longtime Xbox division head Phil Spencer stepped down this year and was replaced by new CEO Asha Sharma, along with other executive-level changes. Also on Monday, Xbox Game Studios head Craig Duncan left the company; He first played the role in October 2024. Employees across Xbox are bracing for more layoffs in 2026 following an ominous public memo from Sharma in mid-June, just as the Summer Game Fest glow has all but faded.
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