Multiple Xbox Game Studios Reportedly Facing Closure, Including Ninja Theory
The reported closures target studios Microsoft acquired less than a decade ago, signaling a sharp reversal of its content-expansion strategy under the new Xbox leadership's business reset.
Reporting from 4 sources: Automaton, Game Spark, GameBusiness.jp, GIGAZINE.
Multiple outlets report that several studios under Xbox Game Studios are at risk of closure, with Ninja Theory, Compulsion Games, and Double Fine named as those facing potential shutdown or forced independence. According to The Verge, Ninja Theory staff were informed of the closure on June 15, 2026, and the studio hopes a buyer can be found. Bloomberg reports that Compulsion Games and Double Fine are in discussions to leave Xbox Game Studios. The reports follow the recent resignation of Xbox Game Studios head Craig Duncan and Chief of Staff Louise O'Connor, as reported by The Game Business. These moves come after Xbox CEO Asha Sharma announced a business reset earlier this year, which included plans for large-scale layoffs and budget cuts. The studios in question were all acquired by Microsoft between 2018 and 2019. Ninja Theory had just announced a new title, 'Senua', at the Xbox Games Showcase days before the reported closure. Microsoft has not officially commented on the reports.
Ninja Theory staff were told of the closure during a conference call on June 15, according to The Verge. The studio is based in Cambridge, UK. It had just announced the new title "Senua" at the Xbox Games Showcase on June 16, a 2027 release that inherits the DNA of the "Hellblade" series. The Verge reports that staff hope a buyer can be found for the studio.
Compulsion Games, based in Montreal, Canada, employs about 90 people according to LinkedIn, though Kotaku reports the actual number is higher and multiple employees have started job hunting on social media. The studio released "South of Midnight" last year. Its management told Kotaku they are "negotiating with Microsoft about the studio's future" but did not disclose details. Bloomberg reports that Compulsion Games and Double Fine may be given the opportunity to become independent.
Double Fine, based in San Francisco, USA, is known for the "Psychonauts" series. It released "Keeper" last year and "Kiln" in April this year. All three studios were acquired by Microsoft between 2018 and 2019.
Craig Duncan, who became head of Xbox Game Studios in November 2024, stepped down on June 15. Until a successor is found, Xbox Game Studios will be under the command of Matt Booty, Xbox's Chief Content Officer. Louise O'Connor, Chief of Staff of Xbox Game Studios, also left Microsoft. O'Connor started her career as an animator for the Nintendo 64 game "Conker's Bad Fur Day."
Xbox CEO Asha Sharma and Chief Content Officer Matt Booty issued a joint statement declaring a business reset, which they said was driven by declining annual sales due to increased competition and rising hardware component prices. The statement also said the studio system had been overly expanded to supply content for Xbox Game Pass and Xbox Cloud Gaming. Microsoft has not officially commented on the studio closures or layoffs.
Synthesized by Yomimono from the 4 cited sources below, including Japanese-language reporting where cited, then editorially reviewed before publishing.
Sources
- Automaton 新作発表後すぐ“閉鎖危機”のNinja Theory、「新作発表前からスタジオ閉鎖・売却方針が決まっていた」との報道。“買い手”を探す狙いもあってか
- Game Spark 閉鎖報道のNinja Theory、最新作『Senua』発表時点でマイクロソフトは提携解消計画を立てていた…？海外メディア報じる
- GameBusiness.jp 新作発表から1週間…『Hellblade』開発元Ninja Theory閉鎖すると報道―他のXBOX関連スタジオも危機に直面か
- GIGAZINE XBOXの幹部が退任＆傘下のゲームスタジオCompulsion Games＆Ninja Theoryが閉鎖か