Double Fine and Ninja Theory reportedly negotiating exits from Xbox

Following word that Compulsion Games faces closure, Bloomberg says Microsoft is looking to shed additional studios. Compulsion, Psychonauts developer Double Fine and Hellblade maker Ninja Theory are said to be in active negotiations to spin off so they can continue independently rather than shut down, and other unnamed studios are reportedly at risk.

Ninja Theory only recently revealed a new game, Senua, during Xbox's Summer Game Fest showcase. Double Fine has struggled to get projects such as Kiln and Keeper to stick since Psychonauts 2, and Compulsion — acquired in 2018 — has only released South of Midnight while indicating it was working on a new project.

Employees from affected developers have already been posting about looking for new jobs, and even if studios buy their independence they are expected to need layoffs to reach a sustainable headcount. The reorganization is being overseen by new Xbox CEO Asha Sharma, who has said the business "cannot continue" as-is.

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