Double Fine, Ninja Theory, And More Reportedly Seeking Independence

Earlier today, word broke that Microsoft is reportedly planning to close Compulsion Games --the studio behind South of Midnight , We Happy Few , and Contrast --as part of a larger round of layoffs and studio closures . Now, there's word that a handful of Xbox Studios' smaller developers are taking some steps to avoid that fate.

Bloomberg reports that Compulsion, Double Fine, Ninja Theory, and 'several other studios' are in negotiations with Microsoft to spin off their companies from Xbox Studios to prevent full closures. This move could allow the studios to buy out Microsoft's stake or seek new financial backers as owners. However, job losses are expected, with 'many employees likely to lose their jobs' as the studios go independent. Employees at some studios have been given permission to seek alternative employment.

Reports suggest that Ninja Theory may be further along in the process, as Microsoft is said to have already decided to close the studio. The extent of potential layoffs remains uncertain, with rumors circulating that Microsoft is contemplating spinning off Xbox into a separate entity. Microsoft CEO Satya Nadella emphasized the importance of the Xbox gaming division's financial performance. Meanwhile, Craig Duncan, the head of Xbox Game Studios, has departed the company after 15 years, along with his chief of staff, Louise O’Connor.