Three Xbox studios—Double Fine, Compulsion Games, and Ninja Theory—are currently in danger of closure, with employees able to seek new work as leaders negotiate to try and save what they can, according to a Bloomberg report.
Earlier today, we reported that Xbox was preparing to shutter South of Midnight developer Compulsion Games, with studio leadership in active negotiations to determine the studio’s fate. Bloomberg has since reported that both Psychonauts maker Double Fine and Hellblade developer Ninja Theory are in similar situations, despite the latter having just revealed a new game for release next year. A potential outcome is that the studios could go independent, though this would likely still result in heavy job losses.
All this comes just days after Xbox CEO Asha Sharma and Microsoft Game Studios head Matt Booty published an open email to the company in which the two highlighted numerous difficulties faced by the business, including that it had “over extended” itself in studio acquisitions, and saying the company tried too hard to juggle too many different platform strategies and has “not adequately funded” its studios to be competitive. According to the email, Xbox has spent $20 billion on studio investments in five years, not including its $69 billion purchase of Activision Blizzard King, while its annual revenue has declined nearly half a billion.
Alongside this email, Bloomberg reported that a major wave of layoffs is on the horizon after the end of Microsoft’s fiscal year on June 30. Earlier today, head of Xbox Game Studios Craig Duncan resigned his position.
Xbox has not returned Kotaku‘s request for comment on the situation.