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Xbox Reportedly Preparing to Close or Spin Off Several First‑Party Studios

A 100‑day Xbox Reset aimed at restoring profitability, with rising hardware costs plus weaker Game Pass revenue making studio cuts or spin‑offs likely after Microsoft’s fiscal year ends.

Overview

  • Reports on Monday said multiple Xbox‑owned studios, including Compulsion Games, Ninja Theory and Double Fine, are in active negotiations to buy themselves back or find buyers to avoid being shut down.
  • Staff at several affected studios were told the situation is in flux and have been given permission to look for other jobs, and some employees have publicly posted that they are seeking new roles.
  • The Verge reported that Ninja Theory staff were told on a call that the studio is being closed, though sources say employees hope a buyer will emerge to keep the team operating.
  • Microsoft and Xbox have not issued public confirmations of specific studio closures, and reporting places any wider layoffs or formal restructuring to take effect after the fiscal year close on June 30.
  • Executives have framed the moves as part of a profitability push driven by years of heavy studio investment, rising component costs and weakening Game Pass economics, a shift that could refocus Xbox on its largest franchises and prompt further job losses.