Xbox is parting ways with four studios: What happens to Compulsion, Double Fine and more
Follow Us
On Monday evening, Xbox CEO Asha Sharma had an announcement to make. But this wasn’t about a logo redesign or some new decision that would make gamers happy. It was about the very people who have spent years building the Xbox. In a post on her official X handle, Sharma shared an email that was sent to the Xbox team recently. And the email talked about Xbox cutting 3200 jobs and going through a major restructuring. Calling the move as ‘painful’, the new Xbox CEO then went on to give a clearer picture of what lies ahead for the console in future. Not only this, the email also mentioned how Xbox is now parting ways with four game studios including Compulsion Games, Double Fine Productions, Ninja Theory and Undead Labs. So what happens to these four? Read on.
SurveyAlso read: Last chance to play these Xbox Game Pass games before they leave: Check the full list
What will happen to the studios?
First thing’s first, the aforementioned studios will not be shut down. Two of them are going independent while the other two will have new owners. Here’s a detailed look at what lies ahead.
Let’s first talk about Compulsion Games, which is best known for the game South of Midnight. The studio will go independent once again and the developer will retain its intellectual property, existing catalogue and enough runway to work on its next project outside Xbox.
Walking down a similar path, Double Fine Productions is also returning to independent ownership. The studio, known for titles like Psychonauts 2, will continue operating independently with its IP and catalogue.
However, the story is different for Ninja Theory. Xbox says that the studio will be moving to a new ownership. The company added that funding is already in place to ensure work on the Senua franchise continues as planned.
Meanwhile, Undead Labs is also expected to move under new owners while continuing development of State of Decay 3. Xbox says the transition is being planned in a way that allows the studio to complete the game without disruption.
The email also briefly mentioned Arkane. However, unlike the other four studios, no final decision has been made. Xbox said Arkane’s management in France has started the required consultation process to explore different strategic options, meaning its future is still under review.
The reason behind Xbox restructuring
In the same email, Sharma explained that Xbox’s current business model is no longer sustainable. She said the company entered its current console generation with a smaller install base and higher operating costs than its competitors. While investments in Game Pass, multi platform publishing and a larger portfolio of studios created value, they did not grow at the pace Xbox had expected.
The company also admitted that owning a large number of studios has become increasingly difficult as the gaming industry continues to grow. Sharma noted that Xbox now competes not only with major publishers but also with thousands of successful independent developers, making it impractical to own every promising studio.
Despite the restructuring, Xbox says none of its publicly announced first party games have been cancelled. The company also plans to continue investing in gaming, but with a stronger focus on efficiency, fewer management layers and projects that fit its long term strategy.
Finishing off the long email, Sharma wrote, ‘History is full of companies that mistake longevity for inevitability. We will not be one of them.’
Also read: Before Resynced, every Assassin’s Creed game and the best order to play them
