The situation surrounding XBOX’s first-party studios appears to be becoming increasingly complicated, with a new report suggesting that several developers are actively seeking ways to avoid being shut down amid Microsoft’s ongoing restructuring efforts.
Following recent reports involving Compulsion Games, Ninja Theory, and other XBOX-owned teams, new information indicates that some studios may be exploring a path back to independence in order to survive.
Multiple Studios Reportedly Seeking Buyouts
According to a report from Bloomberg’s Jason Schreier, several XBOX-owned studios are currently attempting to negotiate arrangements that would allow them to continue operating outside of Microsoft’s direct control.
The report claims that developers including Double Fine Productions, Ninja Theory, and Compulsion Games have been discussing potential deals that could see them regain independence rather than face closure as part of Microsoft’s restructuring plans.
Perhaps most notably, the report suggests that some studios are interested in buying themselves back from XBOX, effectively returning to independent status after years under Microsoft’s ownership.
According to Schreier’s sources:
“Employees at several studios have been informed of the situation and given permission to seek new work but were told that the status of the studios is still in flux.”
That uncertainty appears to be affecting multiple teams across XBOX Game Studios as leadership evaluates the future of its development network.
A Difficult Period For XBOX
The reports come shortly after XBOX CEO Asha Sharma issued an internal memo warning employees that difficult decisions were ahead.
According to previous reports, Microsoft is preparing another wave of layoffs and operational changes throughout July as part of a broader effort to improve efficiency within its gaming division.
The company has spent tens of billions of dollars acquiring publishers and studios over the last several years, including Bethesda and Activision Blizzard. While those acquisitions dramatically expanded Microsoft’s gaming portfolio, they also significantly increased operating costs.
Recent reports have even suggested Microsoft has explored the possibility of restructuring XBOX into a separate subsidiary, highlighting just how much scrutiny the gaming division is currently facing.
Ninja Theory Reportedly Facing Closure Just Days After Revealing New Game
The Timing Feels Particularly Strange
What makes these reports especially surprising is that they arrive only days after XBOX delivered one of its strongest showcases in recent memory.
The recent XBOX Games Showcase featured major announcements, first-party exclusives, and highly anticipated reveals that generated considerable excitement among fans. Among those announcements were new projects from studios now reportedly fighting for their future.
For example, Ninja Theory recently revealed Senua, a new title targeting a 2027 release window, while Double Fine continues to work on multiple creative projects following the success of games like Psychonauts 2.
The contrast between ambitious game announcements and potential studio closures has left many players confused about Microsoft’s long-term strategy.
Craig Duncan’s Departure Adds More Questions
Adding to the uncertainty, reports recently emerged that Craig Duncan, head of XBOX Game Studios, has stepped down from his position.
While Microsoft has not publicly connected that departure to the broader restructuring efforts, the timing has naturally fueled speculation as the company undergoes one of the biggest transitions in its gaming history.
Combined with studio closure rumors, layoffs, and ongoing leadership changes following Phil Spencer’s retirement earlier this year, it paints a picture of a company still trying to define its next chapter.
Nothing Is Final Yet
Despite the growing number of reports, it is important to note that none of the affected studios have officially announced closures.
In fact, the latest information suggests that negotiations remain ongoing and that several teams are actively exploring solutions that could allow them to continue operating.
Whether that results in independent buyouts, new ownership groups, or a reversal of Microsoft’s plans remains to be seen.
For now, the future of some of XBOX’s most respected studios remains uncertain, and the coming weeks could prove crucial for teams such as Double Fine, Ninja Theory, and Compulsion Games.
