Microsoft in talks with multiple Xbox studios

Microsoft is conducting active negotiations with several Xbox game studios, including Compulsion Games, Double Fine and Ninja Theory, to determine whether those teams will remain under Microsoft ownership, be sold, or return to independent operation. Company representatives have been meeting with studio leaders to review options and terms.

The discussions cover financial and operational arrangements. One option under consideration would allow a studio to buy its assets or take over operations from Microsoft and continue independently. Company officials warn that a buyback transition could require staff reductions because the financial support and overhead available to an independent studio differ from Microsoft’s current structure.

Some employees at affected studios have been given permission to look for other roles. Multiple studios beyond the three named are being reviewed, and Arkane has also been mentioned in internal discussions. Final outcomes may vary by studio and could include continued Microsoft ownership, a sale, a buyback, or closure.

The talks form part of a broader review of Xbox’s development groups and cost base. Microsoft acquired many of the studios involved over the past decade to expand content for Xbox platforms. The studios named are known for specific titles: Double Fine for Psychonauts and narrative projects, Ninja Theory for Hellblade, and Compulsion for We Happy Few.

Studio staff, external partners and project schedules may be affected depending on the results of the negotiations. Microsoft has not published a complete list of studios under review or the specific terms being discussed. Company sources expect decisions to be finalized by the end of the month and say further announcements and internal guidance on staffing and projects will follow.