Microsoft's ongoing "Xbox reset" initiative may result in the closure of multiple internal game development studios, according to recent reports. Among the teams reportedly at risk are Double Fine, known for the Psychonauts series and Broken Age, and Ninja Theory, which recently unveiled a new installment in the Hellblade saga.
Bloomberg, citing anonymous sources familiar with Microsoft's plans, indicates that these studios, along with "several others," are facing an uncertain future. The report suggests that Ninja Theory could close unless a buyer is found. Meanwhile, Double Fine is reportedly in negotiations to spin off from Microsoft, though potential job losses are still anticipated even for studios that achieve independence.
Double Fine, founded 26 years ago by veteran developer Tim Schafer, was acquired by Microsoft in 2019 under the leadership of then-Xbox CEO Phil Spencer. Schafer had previously praised Microsoft's commitment to preserving the studio's creative culture and independence, recounting instances where the company supported unusual game concepts.
The reports of potential studio closures come amid a broader strategic shift within Xbox. New Xbox CEO Asha Sharma has indicated that the division is currently "over extended," despite Microsoft's overall profitability. This period of consolidation also follows the recent departures of the head of Xbox Game Studios and its chief of staff. The implications for the future development landscape within Xbox remain to be seen as these restructuring efforts continue.