Xbox Studios Push for Spin-Offs to Dodge Potential Closures

Updated:12:03 PM CEST Sep,16

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Gameguru Mania News - Jun,16 2026 -

Xbox Studios Push for Spin-Offs to Dodge Potential Closures - console
(hx) 10:27 AM CEST - Jun,16 2026 - Post a comment / read (1)

Several Xbox-owned studios, including Compulsion Games, Ninja Theory, and Double Fine, are in active talks with Microsoft to spin off as independent entities.

The negotiations come as the studios try to avoid being shut down amid broader restructuring at Xbox.

This move follows recent reports of Microsoft evaluating its first-party gaming portfolio and cutting costs.

Ninja Theory recently announced a new project, which adds uncertainty to any immediate closure plans.

The studios are seeking greater independence while Microsoft focuses resources on its biggest franchises.

Xbox insider NateTheHate says major layoffs are expected across the Xbox division and described the situation as “a bloodbath.”

He also supported reports that Compulsion Games could be shut down, claiming that South of Midnight had a high budget but sold poorly.

In another comment, Nate said Double Fine has a buyout clause that could allow the studio to become independent again if needed.

Mark Gordon, head of Treyarch, is retiring today.

The timing comes on the heels of:

- XBOX head of studios departing today
- XBOX Chief of Staff leaving today
- Compulsion Studios shuttering today.

The XBOX re-org train is already hitting very hard. This retirement timing sure… pic.twitter.com/KonR25yT9R
— Grummz (@Grummz) June 15, 2026

Xbox Live is reportedly down for hundreds of gamers right now. Are you one of them? #Xbox #XBoxLive #XboxDown https://t.co/GycZAKQ0oN
— StatusIsDown (@status_is_down) June 16, 2026

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