The planned retrenchment, set to trigger on July 6th, aims to reshape the company’s gaming footprint through a combination of studio closures, spinoffs, and outright sales. Microsoft is actively seeking buyers for developers including Undead Labs, Compulsion Games, Double Fine, and Ninja Theory. For many of these teams, the pressure is already tangible; staff at Compulsion Games have been encouraged to seek employment elsewhere, bracing for an imminent shutdown.
Microsoft prepares deep Xbox cuts and potential Arkane closure
Five internal studios face the chopping block as Microsoft prepares a massive restructuring of its gaming division. Among the casualties under consideration is the highly anticipated Marvel’s Blade, a project currently struggling with budget overruns and a development timeline that has pushed its release date to late 2027.
These measures represent a stark "reset" for the Xbox business under CEO Asha Sharma. While Sharma has publicly framed the strategy as a path toward becoming the industry's premier entertainment entity, the immediate reality involves at least 1,000 potential job losses. The fate of these studios remains fluid, dependent on the company's ability to finalize divestment deals, yet the scope of the reduction suggests a fundamental contraction for the Xbox division.
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