Sources: several Xbox studios, including Hellblade maker Ninja Theory, are in talks with Microsoft to buy themselves back and go independent to avoid closure

The studios, which include Compulsion Games and Double Fine, are in active negotiations with Xbox and may be given the chance to go independent.

Bloomberg 2026-06-15 Jason Schreier

Context & Ripple Effects

Microsoft’s earlier Xbox expansion included acquiring Ninja Theory and Compulsion Games in 2018, a shift away from relying primarily on outside development partners. Subsequent coverage of studio closures and planned Xbox cuts indicates that the enlarged portfolio has been under growing scrutiny.

The reported buyback talks sit ahead of a broader Xbox “reset” in which Microsoft is said to be planning job cuts and divestitures, making independence a potential alternative to outright closure for some teams.

First-order effects

Ninja Theory, Compulsion Games and Double Fine could avoid closure by separating from Microsoft, while Microsoft could reduce the number of studios it directly operates.
Any studios that complete a buyback would regain independent control of their operations and future projects, rather than remaining within Xbox’s internal portfolio.

Second-order effects

Microsoft’s Xbox organization would need to manage a smaller first-party pipeline while deciding whether to retain commercial relationships with spun-out teams.
Other acquired studios facing portfolio review may view a management-led buyback or divestiture as a possible outcome, rather than assuming continued internal funding.

Third-order effects

If these talks result in divestitures, they would reinforce a reversal from Xbox’s 2018 studio-acquisition strategy toward a more selective internal footprint supplemented by external partners.
The outcome will test whether independent studios can preserve teams and creative continuity after leaving a platform owner, or whether independence mainly delays further restructuring.

The trend: Xbox appears to be moving from rapid first-party consolidation toward portfolio rationalization, with ownership of development capacity becoming more selective.

Discussion

Pure Xbox Fraser Gilbert on x
Report: Multiple Xbox Studios In ‘Active Negotiations’ With Microsoft To Avoid Closure
@pirat_nation @pirat_nation on x
Bloomberg also reports that more Xbox studios could be at risk beyond Compulsion Games, Double Fine, and Ninja Theory. “Safe to say that the Xbox of July will look drastically different than the Xbox of June.” The idea is to let some teams continue on their own instead of [image]
@nextgenplayer Hunter on x
“The Xbox of July will look drastically different than the Xbox of June” More Xbox studios are at risk of closure beyond Ninja Theory, Double Fine, and Compulsion Games - Bloomberg's Jason Schreier ▶️ https://bsky.app/... [image]
@tomwarren Tom Warren on x
Xbox is closing down Hellblade creator Ninja Theory. Compulsion Games and Double Fine are also in “active negotiations” about spinning off https://www.theverge.com/...
@stevesaylor Steve Saylor on x
If the news about Compulsion Games, Ninja Theory, and Double Fine potentially closing is true, that's three studios that, within the past ten years, have made a concerted effort to make their games more accessible. Something that's been part of Xbox's culture for the past ten
@mikestrawmedia Mike Straw on x
Fine: Two of the studios I've been told, including getting messages from employees at the locations who are “scared”, are Compulsion and Arkane. Despite public messaging, many within the studios have expressed real worry and have overheard conversations about the future of the
@victor_lucas Victor Lucas on x
If Microsoft is closing down Compulsion Games immediately following their multiple wins across several categories at the Canadian Game Awards for a game that could clearly be the exact long-running exclusive action adventure franchise that differentiates the Xbox brand from the
@grummz @grummz on x
“Best Games” All the gaming press does is lie and gaslight you. [image]
@pirat_nation @pirat_nation on x
Microsoft has reportedly shut down Compulsion Games, the studio behind South of Midnight. The report comes after Mike Straw said employees at Compulsion and Arkane were worried about their studios' future. He later added that some of his sources were senior staff, who said there …
@simonzijlemans Simon Zijlemans on x
I get it, studio closures suck. But take it easy with that ‘OMG AWARD WINNING STUDIO’ stuff. Compulsion made 3 games in 13 years. Their highest rated game is a 75/100. Hardly anyone bought these games. The moment talk of Xbox shutting down studios began, the first name that
@jasonschreier Jason Schreier on bluesky
These are not the only three Xbox studios at risk of closure, but there's still a lot of uncertainty surrounding the company's plans. More to come in the next few days and weeks. Safe to say that the Xbox of July will look drastically different than the Xbox of June.
@jasonschreier Jason Schreier on bluesky
BREAKING: Several Xbox studios, including Compulsion, Ninja Theory and Double Fine, are negotiating with Xbox as they try to avoid closure. Some or all could spin off. — Lots still in flux as many studios remain unsure about what's happening. — Here's the latest: www.bloombe…
@lorenschmidt Loren Schmidt on bluesky
this is such a shame. how dare they shutter one of the most interesting studios. i swear, it's like everyone above a certain pay grade just magically forgets that actual human beings make games and they need respect and stability. — kotaku.com/xbox-shutter...
@hazzadorgamin @hazzadorgamin on bluesky
Head of Xbox Game Studios Craig Duncan and Louise O'Connor chief of staff stepped down. — www.thegamebusiness.com/p/xbox-game- ... [image]
r/videogames r on reddit
Xbox is closing down Hellblade creator Ninja Theory
r/Steam r on reddit
Xbox is closing down Hellblade creator Ninja Theory
r/TwoBestFriendsPlay r on reddit
(theverge) Xbox Closing Ninja Theory
r/gaming r on reddit
Xbox is closing down Hellblade creator Ninja Theory
r/hellblade r on reddit
Xbox is closing down Hellblade creator Ninja Theory
r/pcgaming r on reddit
Xbox is closing down Hellblade creator Ninja Theory
r/Games r on reddit
Xbox is closing down Hellblade creator Ninja Theory
r/xbox r on reddit
[Bloomberg] Several Xbox Studios, including Compulsion Games, Ninja Theory, and Double Fine, are in active negotiations with Xbox to spin off as they try to avoid closure
r/PS5 r on reddit
Jason Schreier- Compulsion, Ninja Theory and Double Fine are negotiating with Microsoft to avoid being shut down. All could be spun off too.
r/LastStandMedia r on reddit
Per Jason Schreier: Studios in Microsoft's Xbox Division Brace for Closures
r/consoles r on reddit
Studios in Microsoft's Xbox Division Brace for Closures
r/kindafunny r on reddit
Xbox Game Studios boss Craig Duncan steps down after 15 years at the company. Chief of staff Louise O'Connor also set to depart.

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