Microsoft in talks with several Xbox studios to avoid closures

Microsoft is negotiating with several internal Xbox studios — Compulsion Games, Ninja Theory, Double Fine and Arkane — about the studios’ futures as the company reviews its internal teams. The discussions aim to determine whether each studio will remain inside Xbox, spin out as an independent company, be sold to another publisher, or be closed.

The talks began this week and involve studio leaders and Microsoft executives. Compulsion’s leadership is in direct negotiations with Microsoft. Ninja Theory staff were informed that the studio faces a risk of closure and are exploring potential buyers and other options. Double Fine leaders are part of the discussions. Arkane has expressed concern about its standing within the Xbox group; the studio is developing a Marvel’s Blade title.

Ninja Theory revealed a new Senua title at an Xbox showcase earlier this month. Compulsion released South of Midnight on the Switch 2 in March. Double Fine is known for the Psychonauts series and released Kiln recently. Those releases and announcements form part of the context for the current talks.

People familiar with the discussions say talks are ongoing and that no final decisions have been announced. The sources say options under consideration include independence, sales to outside publishers or closures. Employees at the affected studios are awaiting formal notices while some teams are pursuing potential buyers.

A reporter wrote that “the Xbox of July will look drastically different than the Xbox of June.”

Microsoft and the studios have not issued detailed public statements about the outcomes under discussion. Company leaders and studio managers continue negotiations, and updates are expected as parties reach decisions.