Bloomberg: Several Xbox studios in negotiations to avoid closure

Several studios within Xbox are in active negotiations to spin off from the company in order to avoid closure, including Compulsion Games, Double Fine Productions, and Ninja Theory, according to a Bloomberg report by Jason Schreier citing people familiar with the company’s plans.

A separate report by The Verge cites sources claiming staffers at Ninja Theory were informed of the studio’s closure today, though the studio is hoping to find a buyer. Ninja Theory just announced a new game, Senua, during Xbox Game Showcase 2026 earlier this month.

Kotaku also reported earlier today that Xbox was planning to shut down Compulsion Games, but later updated its story to note that studio leadership was in “negotiations” with Xbox, the details of which were not disclosed.

While the studios may have the opportunity to buy themselves back and operate independently, the move could still result in significant job losses, according to the Bloomberg report.

On Bluesky, Schreier added that Compulsion Games, Double Fine Productions, and Ninja Theory are not the only studios at risk of closure, and that layoffs are not planned until after the end of Microsoft’s fiscal year on June 30.

Last week, Xbox CEO Asha Sharma published a memo called “Next 100 Days: Xbox Reset,” hinting at incoming layoffs as the company plans to “reset for a stronger Xbox.” The memo noted that costs are increasing due to the ongoing component crisis and that the company’s current studio system is “over extended.”

Earlier today, Xbox Game Studios head Craig Duncan announced that he will step down from his role. According to the Bloomberg report, Duncan’s decision was made last week, just ahead of the planned layoffs.