Multiple Microsoft-owned Xbox game studios are reportedly facing potential closures as part of a broader restructuring within the company. According to reports, developers behind titles such as South of Midnight, Psychonauts, and Hellblade are in negotiations with Microsoft to buy back their independence, a move aimed at averting complete studio shutdowns.
Bloomberg reports that Compulsion Games, Double Fine, and Ninja Theory have each begun discussions with Microsoft to regain autonomy. The potential closure of Compulsion Games was also corroborated by Kotaku.
While specific details regarding other studios at risk remain unconfirmed, Insider Gaming has reported that staff at Arkane, the studio behind Blade, are experiencing fear about their positions. The Verge has additionally indicated that employees at Ninja Theory were informed of an impending closure on Monday, though the team hopes to find a buyer.
Ninja Theory recently revealed its upcoming game, Senua, at the Xbox Games Showcase earlier this month. Senua is slated for release next year on PlayStation 5, Steam, and Xbox Series S/X, and will be available on Game Pass. The announcement of potential closures comes shortly after reports surfaced last week detailing plans by newly appointed Xbox CEO Asha Sharma for a business "reset" that includes budget reductions and significant staff layoffs. This news also follows the departure of Craig Duncan as head of Xbox Game Studios less than two years into his tenure.
In recent shifts at Xbox, the company has focused more on console exclusives, with titles like Gears of War: E-Day and Clockwork Revolution opting not to release on PlayStation 5. Earlier in June, Matt Booty, Xbox's chief content officer, stated that decisions about future console exclusives would be made on a case-by-case basis, while emphasizing that major multiplayer and live service games from Xbox would continue to be released on multiple platforms.