Xbox weighs closure of Ninja Theory, Double Fine, Compulsion

Xbox reportedly – Xbox is reportedly preparing to close or sell Ninja Theory, Double Fine, and Compulsion Games. Ninja Theory employees were told the studio would be shut down as the team tries to find a buyer. Double Fine and Compulsion Games are also in buyout talks. The move

For Ninja Theory teams, Monday didn’t feel like a routine check-in. Employees were informed the studio would be closing, and the immediate fight became simple and urgent: find a buyer who can keep the lights on.

Ninja Theory — known for the Hellblade series — has already shown the shape of what’s next. It was featured in the recent Xbox Summer Game Fest showcase with a new entry planned for 2027. Now, according to reports, the studio’s future depends on whether someone else steps in.

Double Fine is facing a different kind of pressure, but the stakes appear equally high. The studio behind Psychonauts games and classics including Brütal Legend. Broken Age. Keeper. and a long list of LucasArts adventures was founded by Tim Schafer and friends in 2000. This time. Bloomberg reports that Double Fine leaders are in active negotiations to buy themselves back from Xbox rather than be closed.

Compulsion Games, also reportedly at risk, is in similar discussions. The Montreal studio created Contrast, We Happy Few, and South of Midnight — the latter released in April 2025. Under the same reported pattern, its survival is being negotiated, not assumed.

Bloomberg also reported that several other studios under the Xbox Game Studios banner are negotiating for their futures and are at risk of being shut down. As Xbox Game Studios stands officially today. it includes dozens of studios: Arkane. Bethesda. Halo Studios. id Software. Obsidian. Playground Games. ZeniMax and Activision Blizzard King.

Xbox has not yet clarified the reported closures and buyout talks. MISRYOUM has contacted Xbox for clarification on the situation.

The sequence of these decisions sits uncomfortably alongside Microsoft’s years-long restructuring of its game portfolio. Microsoft’s modern game-studio acquiring spree began in 2018 with the purchase of Undead Labs. Playground Games. Ninja Theory and Compulsion Games. plus the formation of The Initiative. The momentum continued through 2020 and 2021 with eight more studios acquired under ZeniMax Media, including Arkane, Bethesda and id. Everything accelerated further in 2022. when Xbox announced plans to purchase Activision Blizzard for $69 billion — the largest acquisition in video game history — before the deal finally closed at the end of 2023 after a lengthy regulatory battle.

Since the acquisitions. Microsoft has carried out multiple massive rounds of layoffs affecting thousands of employees in its gaming division. and it has shuttered well-known studios. including The Initiative. Double Fine, Ninja Theory, Compulsion and the other at-risk studios now sit in that same orbit.

There’s another pressure layer around leadership and timing. Longtime Xbox division head Phil Spencer stepped down this year and was replaced by new CEO Asha Sharma. alongside other executive-level changes. On Monday, Xbox Game Studios head Craig Duncan also left the company; he first took the role in October 2024. In mid-June. just as Summer Game Fest’s spotlight faded. Sharma issued an ominous public memo that has left employees across Xbox bracing for more layoffs in 2026.

Put together, the reported buyout talks and shutdown planning don’t read like a single isolated decision. They land as the latest turn in a pipeline of changes that has already cost thousands of jobs and ended several studios — leaving employees watching the same question from different angles: whether a future can be negotiated in time. or whether it’s already been decided.

Xbox Ninja Theory Double Fine Compulsion Games Xbox Game Studios Hellblade Psychonauts South of Midnight layoffs studio closures Asha Sharma Craig Duncan Phil Spencer Microsoft gaming