Ninja Theory, Double Fine Reportedly Face Closure Amid Xbox Studio Restructuring
Ninja Theory, known for 'Hellblade,' and Double Fine, creator of 'Psychonauts,' are reportedly among several Xbox studios negotiating to avoid closure. Microsoft is implementing significant cuts within its Xbox business, leading to concerns across its gaming division. These studios, along with Compulsion, are reportedly in discussions with Microsoft about potential independence, a move that could still result in substantial layoffs. The situation follows a memo from Xbox boss Asha Sharma, highlighting financial challenges and a need for a "company reset."
Hellblade developer Ninja Theory and Psychonauts developer Double Fine are reportedly among the studios negotiating to prevent closure as Microsoft makes significant cuts to its Xbox business.
Bloomberg has reported that Compulsion, Ninja Theory, and Double Fine are in discussions with Microsoft regarding potential independence. Such a transition would likely still involve significant layoffs. This news follows an earlier report by The Game Business indicating that Xbox Game Studios boss Craig Duncan had stepped down, and a Kotaku report stating that 'South of Midnight' developer Compulsion was under threat of closure.
Microsoft-owned studios are reportedly concerned about future changes, with Ninja Theory and Double Fine specifically named as being in talks with their parent company. The developments follow a recent memo from new Xbox boss Asha Sharma, which warned of a "company reset" widely interpreted as a signal for major layoffs and studio closures.
Sharma's memo indicated that Microsoft's gaming business currently operates with a 3% accountability margin, a decrease year-on-year. She stated that excluding Activision Blizzard King, Microsoft had invested over $20 billion in content, platform, and hardware subsidies over the past five years, yet annual revenue declined by nearly half a billion during that period. Sharma emphasized, "Going forward, this cannot continue."
Microsoft CEO Satya Nadella also commented on the situation, noting that "there's more monetization of Xbox games happening on YouTube" than on Xbox. Nadella urged the Xbox team to "innovate both in hardware, as well as in the games, going forward in an economically viable way" to transform it into a sustainable business.
Ninja Theory, a UK-based studio, is known for its 'Hellblade' games, which have faced commercial challenges. The studio recently announced the 'Hellblade' sequel, 'Senua,' at the Xbox Games Showcase. Double Fine, responsible for the 'Psychonauts' franchise, released 'Kiln' earlier this year and 'Keeper' last year. The Xbox layoffs are anticipated to take effect by the end of Microsoft's financial year on June 30.
(Source: IGN)
