Following weeks of reports, Xbox has officially announced it has severed its connection with two studios, which have gone independent as a consequence of this. Meanwhile, it’s preparing to sell two more studios. In total, it is shedding four different studios, and also laying off 3,200 employees in the largest layoffs in Xbox history.
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It’s not fully clear yet how many of its studios have been impacted by their layoffs and if there are any high-profile layoffs in the mix. We do know the two studios that have gone independent, which are Compulsion Games and Double Fine Productions. Meanwhile, on top of this, it is preparing to sell Undead Labs and Ninja Theory. It also sounds like Bethesda’s Arkane is going to be sold as well, but the verbiage around this is less clear. Compulsion Games and Double Fine did not have any announced games with Xbox, but Ninja Theory and Undead Labs did with Senua and State of Decay 3, respectively. It sounds like these projects will finish under their new ownership. Meanwhile, it’s completely unclear what the future of Arkane’s Marvel’s Blade is.
Statement From Xbox and More Layoffs
“Compulsion Games and Double Fine Productions will return to management and transition to independent studios with their IP, catalog, and runway for their next games,” reads a snippet from a much larger statement released today by Xbox CEO Asha Sharm. “Ninja Theory and Undead Labs have entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3. In France, Arkane’s management is beginning required consultation with its Works Council to review potential strategic options.”
More About the Five Studios
For those unfamiliar with any of the studios above, Compulsion Games is a Canadian studio that was founded in 2009 and acquired in 2018. It has put out three games to date: 2013’s Contrast, 2018’s We Happy Few, and 2025’s South of Midnight. California-based Double Fine has been around since 2000 and has put out substantially more games. Since its Xbox acquisition in 2019, though, it has specifically released Psychoanuts 2 in 2019, Keeper in 2025, and Kiln in 2026.
Meanwhile, Ninja Theory of the UK was acquired in 2018, 18 years after its founding, and has put out two games since then, which are 2020’s Bleeding Edge and 2024’s Senua’s Saga: Hellblade II. Undead Labs, on the other hand, was also acquired in 2018 after being founded in 2009. It has only ever released two games: 2013’s State of Decay and 2018’s State of Decay 2.
Lastly, Arkane is a studio that Xbox acquired through its acquisition of Bethesda. The French studio is best known for the Dishonored series, as well as Deathloop and Prey. Of the five studios here, it is easily the most high-profile team.
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