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Another Xbocalypse begins: Microsoft are reportedly closing or spinning off Double Fine, Ninja Theory and Compulsion

Edwin Evans-Thirlwell — Tue, 16 Jun 2026 09:54:08 +0000

Xbox are reportedly closing or spinning off Psychonauts developers Double Fine, Hellblade studio Ninja Theory, and South of Midnight creators Compulsion Games, as Microsoft commence efforts to yet again "reset" their billion dollar gaming business after already laying off thousands of staff, cancelling games, and closing several studios over the past couple of years.

Microsoft reportedly only announced Ninja Theory's new game at Summer Game Fest to try and attract a buyer for the studio

Mark Warren — Wed, 17 Jun 2026 09:52:38 +0000

Hellblade developers Ninja Theory are one of the numerous Microsoft-owned studios currently facing a very uncertain future, as the company look to either spin off or shutter a bunch of the developers under the Xbox banner. In Ninja Theory's case, the news that their existence hangs in the balance was made even more jarring by the fact they'd revealed a new game, Senua, earlier this month at Xbox's summer showcase. According to a fresh report, however, Microsoft had already decided they were going to kill or part with the studio prior to Senua's reveal, with that showing aimed - at least in the eyes of Xbox execs - at trying to boost the chances of Ninja Theory attracting some new investors.

Xbox are parting ways with Double Fine, Arkane, Undead Labs, Compulsion, and Ninja Theory in the course of thousands of layoffs

Edwin Evans-Thirlwell — Mon, 06 Jul 2026 14:31:53 +0000

After weeks of uncertainty, Microsoft have finally revealed what their big Xbox business "reset" involves. Spoilers: it's not great! Gaming division CEO Asha Sharma has announced that they will lay off 3200 people over their next financial year, beginning today with around 1600 redundancies. In addition, Microsoft are parting ways with five of their best-known studios: Psychonauts developers Double Fine, State of Decay developers Undead Labs, Senua developers Ninja Theory, South of Midnight developers Compulsion, and Dishonored developers Arkane.

Further details are few, but here are the broad strokes: Compulsion and Double Fine are going indie again, while Ninja Theory and Undead Labs have found unnamed new owners. Arkane's status is unclear: the studio's bosses are currently haggling with a works council of employees over various "strategic options".