Xbox

New earthquake at Xbox: Ninja Theory, Compulsion Games, and Double Fine negotiate their exit amid risk of closure

The Verge reports that Microsoft has already notified the creators of Senua of the studio’s closure.

Update: Jun 16th, 2026 16:38 CEST

The leadership change at Xbox has already signaled profound changes within the Microsoft division. Shortly after the recent Xbox Games Showcase, the new head, Asha Sharma, shared a reflective letter about the strategic mistakes the company has made over the years. The specter of layoffs is once again looming over Xbox, as are potential studio closures. Journalist Jason Schreier reports in Bloomberg that developers such as Compulsion Games, Double Fine, and Ninja Theory are negotiating their exit from the company.

A source has revealed to The Verge that the company informed the creators of Hellblade of the studio’s closure this Monday. Faced with the threat of closure, the studios are trying to negotiate their independence to avoid the most feared outcome. However, sources tell Bloomberg that many employees are likely to lose their jobs. Employees at many Xbox studios have been informed of the situation and have been given permission to seek new job opportunities.

Double Fine has just released Kiln, and Ninja Theory announced Senua, a new installment in the Hellblade series, at the Xbox Games Showcase. Meanwhile, Compulsion Games released South of Midnight in 2025.

New earthquake at Xbox: Ninja Theory, Compulsion Games, and Double Fine negotiate their exit amid risk of closure

Fear at Arkane Studios

Mike Straw of Insider Gaming reports that developers at Arkane Lyon—the studio behind Dishonored and the upcoming Blade—fear that Microsoft might decide to shut down the studio, as it did with Arkane Austin in 2024.

The potential studio closures are part of a new restructuring plan led by Asha Sharma. After being appointed in February 2026, the new head of Xbox has stated that they need to “reset Xbox,” which could lead to a new wave of layoffs. The division’s finances aren’t adding up, and Sharma has been clear on this point: “Going forward, this cannot continue.”