Xbox is preparing to shut down Compulsion Games and is in talks to close Double Fine and Ninja Theory as well. Studio leaders are negotiating with Microsoft over the studios' futures. Heavy job losses are expected even if some studios go independent.
Three Xbox studios face potential closure. Compulsion Games, known for South of Midnight and We Happy Few, is set to be shuttered while Double Fine and Ninja Theory are also in discussions that could lead to the same outcome.
Leadership at Compulsion Games is currently negotiating with Microsoft. Employees at the affected studios have begun seeking new positions. The moves follow an open email from Xbox CEO Asha Sharma and Microsoft Game Studios head Matt Booty that cited overextension in studio acquisitions.
The email noted that Xbox spent $20 billion on studio investments over five years. It also referenced declining annual revenue. A major round of layoffs is scheduled after Microsoft's fiscal year ends on June 30.
Xbox head of Game Studios Craig Duncan resigned his position earlier this week. The company has not commented on the situation.
