Compulsion Games And Different Xbox Studios Reportedly At Danger Of Being Shut Down

Update – June 16, 9:43 a.m.: Following yesterday’s breaking information about reported studio closures being deliberate for Xbox’s gaming division, The Verge reported yesterday that, based mostly by itself supply, Ninja Theory is certainly being closed down by Xbox and is presently searching for a brand new purchaser. The report states that the studio’s workers had been made conscious of the state of affairs on Monday. As of now, there was no official affirmation of the information. 

There have been no main updates concerning the standing of Compulsion Games or Double Fine past the latter posting a cryptic emoji in a Bluesky put up late Monday night. 

Original Story: Earlier in the present day, Kotaku reported that South of Midnight developer Compulsion Games could also be closing its doorways following a report from final week that Xbox is getting ready one other spherical of great layoffs. Although we nonetheless don’t have any official affirmation of Compulsion’s standing, it will not be the one studio vulnerable to being shuttered.

Bloomberg stories that Compulsion Games, together with different studios, together with Hellblade developer Ninja Theory and Psychonauts developer Double Fine, are vulnerable to being shut down by Xbox. The information comes from sources near the state of affairs who haven’t been approved to talk to the press.  According to Bloomberg‘s sources, every studio is negotiating with Xbox to purchase itself again and go impartial, although that will lead to vital job cuts. Bloomberg additionally stories that workers at these studios have been made conscious of the state of affairs and given permission to search for new work. 

If true, this info traces up with Kotaku’s earlier stories that Compulsion’s management is negotiating with Microsoft over the studio’s future; the precise particulars of this alleged dialogue are unknown. Microsoft has not formally confirmed Compulsion’s closure, and the studio has not issued an official assertion on the matter. However, some studio workers, comparable to author Bijan Stephen and senior author Zaire Lanier, made social media posts in the present day asserting they’re searching for work. 

Last week, it was reported that Xbox CEO Asha Sharma and chief content material officer Matt Booty had been planning layoffs. A message penned by the pair was despatched to employees detailing an “Xbox Reset” to handle ongoing points on the firm. Part of this message said that Xbox “overextended” itself by buying so many recreation studios over the past a number of years, whereas acknowledging different challenges comparable to declining income, {hardware} part shortages, and methods described as “overly complex” and never prepared for the years forward. 

“For some of you, these realities will be surprising and even frustrating to discover. We won’t succeed by hiding hard truths, nor will we succeed by doing the same thing and expecting different results. Like the ‘everyday wins’ mentality from the first 100 days, we will sprint to make progress against hardware, content, experience, and services together,” reads a piece of Sharma and Booty’s message.

Microsoft introduced its acquisition of Compulsion Games and Ninja Theory throughout E3 2018; on the 2019 present, it introduced it had bought Double Fine. Compulsion’s most up-to-date launch was South of Midnight, which launched in 2025 to optimistic opinions. As famous by Kotaku, the studio had announced it was hiring solely two months in the past for work on a brand new IP. 

At the Xbox Games Showcase throughout Summer Game Fest final week, Ninja Theory introduced a brand new Hellblade recreation merely titled Senua and billed it as a pure motion expertise in comparison with earlier entries. Senua is scheduled to launch in 2027. Double Fine launched its multiplayer social gathering recreation Kiln earlier this yr, and has shipped 2024’s Keeper and 2021’s Psychonauts 2 below the Xbox umbrella. 

Game Informer has contacted Compulsion Games for remark and can replace this story ought to they reply. Keep in thoughts that this can be a creating story and nothing has been confirmed. We’ll be keeping track of the state of affairs and can replace the story as extra particulars grow to be accessible.