Several studios inside Microsoft’s XBOX gaming division are in talks to spin off from the company as they try to avoid closure, according to a new Bloomberg report by Jason Schreier. The studios named in the report include Compulsion Games, Double Fine, and Ninja Theory, with several other teams across XBOX also said to be at risk.
BREAKING: Several Xbox studios, including Compulsion, Ninja Theory and Double Fine, are negotiating with Xbox as they try to avoid closure. Some or all could spin off.Lots still in flux as many studios remain unsure about what's happening. Here's the latest: www.bloomberg.com/news/article…
— Jason Schreier (@jasonschreier.bsky.social) 2026-06-15T20:16:55.559Z
The studios could still have a chance to buy themselves back from XBOX and become independent, but employees are likely to lose their jobs as part of the process. Bloomberg reported that staff were told about the situation and allowed to seek new work, while also being told the final status of the studios remains unsettled.
The reported talks are part of a wider XBOX reorganization led by Asha Sharma, who became Xbox’s chief executive officer in February. Bloomberg previously reported that Microsoft’s gaming division was planning significant layoffs, while Sharma sent staff a memo warning that Xbox’s current business could not continue in its existing form.
Compulsion Games released South of Midnight last year, Double Fine recently released Keeper and Kiln, and is most known for its Psychonauts series, and Ninja Theory is best known for Hellblade, with its latest game titled just Senua revealed at the XBOX Showcase earlier this month.
The changes also come after a leadership movement inside XBOX Game Studios, as XBOX Game Studios head Craig Duncan and chief of staff Louise O’Connor are reported to be leaving the company.
Microsoft has not announced final decisions on Compulsion, Double Fine, Ninja Theory, or the other Xbox teams reportedly at risk. The reported spin-off talks suggest some studios may survive outside Microsoft, but the process still points to more job losses across XBOX.
The future looks somewhat grim for the in-house studios at XBOX, as Microsoft and its CEO Satya Nadella look to be set in their views that the department needs to be turned profitable, no matter the immediate losses.
