Xbox Layoffs, Studio Closures, And Spin-Offs Today

Xbox is facing significant changes with layoffs, studio closures, and spin-offs announced today.

Throughout 2026, Xbox has been experiencing challenges such as price increases for hardware, fluctuating Xbox Game Pass prices, and the cancellation of funding for collaborative projects. Microsoft is set to lay off 3,200 employees at Xbox, with 1,600 job cuts starting immediately. Compulsion Games and Double Fine Productions are both leaving Xbox to become independent studios, retaining their IPs. Ninja Theory and Undead Labs are in talks to find new owners, while Arkane is reviewing strategic options. Bethesda, Blizzard, King, and Mojang will also face layoffs as Microsoft shifts focus to higher-priority games.