Xbox Studios Face Potential Closures Amid Restructuring

Microsoft’s sweeping “Xbox Reset” is triggering a seismic shift in its studio lineup, with beloved developers like Double Fine and Ninja Theory scrambling to survive.

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The Pressure Behind the Reset

On June 10, 2026, Xbox CEO Asha Sharma and Chief Content Officer Matt Booty published a candid memo acknowledging that Xbox had become “over‑extended,” with a complex studio infrastructure and misaligned investment strategies hindering its competitiveness. They emphasized the need for a clearer focus on flagship franchises and a more agile engineering culture . This memo set the stage for drastic changes across the division, signaling a willingness to shed studios that don’t fit the new strategic vision.

Studios at Risk: Closure or Independence

Reports emerging on June 15–16 reveal that several Xbox Game Studios—including Compulsion Games, Double Fine, and Ninja Theory—are facing imminent closure unless they can negotiate a spin‑off or find new ownership . Bloomberg sources indicate that these studios are in “active negotiations to spin off,” though job losses are expected even if independence is achieved . Ninja Theory was confirmed to be shutting down, with employees told on June 16 that their studio would close, though efforts to find a buyer are underway .