Microsoft's Xbox Game Studios Facing Major Restructuring
Earlier today, news 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 Game Studios' smaller developers are taking some steps to avoid that fate.
According to Bloomberg, Compulsion, Double Fine, Ninja Theory, and "several other studios" have started negotiations with Microsoft to spin off their companies from Xbox Game Studios and avert full studio closures. This move could give the studios a chance to buy out Microsoft's stake in their companies or find financial backers who could become the new owners.
The Spin-Off Process and Potential Layoffs
However, that may not be enough to save every developer at the affected studios. Bloomberg notes that "many employees will likely lose their jobs as a result" of going independent. Consequently, employees at some of the studios have reportedly been cleared to begin looking for other work.
It appears this process may be further along at Ninja Theory, with The Verge reporting that Microsoft has already opted to close the studio. The situation raises questions about the future of these studios and their ability to remain viable independent entities.
Leadership Changes and Restructuring
The scope of the potential layoffs isn't clear, and there have even been reports that Microsoft is considering spinning off Xbox itself into a new standalone company. Microsoft CEO Satya Nadella recently stressed the need for the Xbox gaming division to pull its financial weight.
Ahead of any big changes to Xbox, Craig Duncan, the head of Xbox Game Studios, has left the company after a 15-year stint with Microsoft. Duncan's chief of staff, Louise O’Connor, is also leaving Xbox. These leadership changes suggest a period of transition and uncertainty for the gaming division.
