Xbox is facing a wave of layoffs and potential studio closures under new leadership. According to Bloomberg, at least three developers are in active negotiations with Microsoft regarding their futures: Compulsion Games (known for South of Midnight), Double Fine (Psychonauts, Keeper, Kiln), and Ninja Theory (Senua's Saga: Hellblade II).
Kotaku confirmed that Compulsion Games is among the first studios at risk of shutdown. The report indicates that several other developers are also "at risk of being shuttered," amplifying uncertainty across the Xbox division following weeks of speculation about structural cuts.
The reports are part of an ongoing series of updates about Xbox restructuring under Asha Sharma's leadership, which also includes pressure to accelerate releases of franchises like Elder Scrolls and Fallout. The situation reflects broader challenges facing Microsoft in its gaming strategy.
