According to reports from specialized outlets, Microsoft is in active negotiations to close or divest multiple studios within its Xbox division. Among those affected are Double Fine (creator of Psychonauts), Ninja Theory (developer of Hellblade), and Compulsion Games (responsible for South of Midnight), which launched on Switch 2 in March.
The studios are reportedly being offered for acquisition or could become independent, according to information from Bloomberg and Game File journalist Stephen Totilo. The move is part of a "reset" of Microsoft's gaming division following years of cost-cutting — the company has already conducted mass layoffs, cancelled projects, and shut down other studios in recent years.
One detail that stirred controversy: Ninja Theory announced Senua, a new game in the Hellblade series, at Xbox Games Showcase on June 7th — days before rumors about the possible closures surfaced. According to sources speaking to Totilo, Microsoft had already decided on the sale or shutdown of the developer before the announcement, having allowed the reveal to attract potential investors interested in acquiring the studio.
CEO Asha Sharma sent an internal memo revealing that Microsoft's gaming business operates with a profit margin of just 3%, down from the previous year. That communication signaled major structural changes to the Xbox unit.
