In a nutshell

• Bloomberg reports Compulsion Games, Double Fine, and Ninja Theory are negotiating independence to avoid shutdown.
• Ninja Theory staff reportedly informed of closure, though the studio hopes to secure a buyer.
• Xbox leadership shake‑up and “Next 100 Days: Xbox Reset” memo signal incoming layoffs after June 30.

Coming off a stellar Xbox Games Showcase, a Bloomberg report by Jason Schrieier paints a grim picture as multiple Xbox studios, including Compulsion Games, Double Fine Productions, and Ninja Theory, are in active talks to spin off from Microsoft in order to avoid closure.

The news comes amid wider restructuring efforts at Xbox, with leadership changes and looming layoffs expected by the end of the fiscal year.

Xbox Studios at Risk

According to the report, several Xbox studios are negotiating to buy themselves back and operate independently. While this could preserve creative autonomy, the move may still result in significant job losses.

Ninja Theory, fresh off announcing Senua at the Xbox Games Showcase 2026, has reportedly informed staff of closure plans earlier today according to The Verge, though the studio is seeking a buyer to continue operations. Compulsion Games is also in talks with Xbox, with details yet to be disclosed.

Schreier also added that Compulsion Games, Double Fine Productions, and Ninja Theory are not the only studios at risk of closure.

Leadership Changes

The report follows the announcement that Xbox Game Studios head Craig Duncan will step down, alongside chief of staff Louise O’Connor. Duncan’s decision reportedly came just ahead of the planned layoffs.

Xbox Reset Memo

Last week, Xbox CEO Asha Sharma circulated a memo titled “Next 100 Days: Xbox Reset”, outlining cost pressures from the ongoing component crisis and admitting the studio system is “over extended.” The memo hinted at layoffs to strengthen the company’s long‑term position.