Xbox moves to close Ninja Theory, Double Fine and Compulsion Games

Microsoft’s Xbox division is undergoing a major restructuring that puts three of its creative studios at risk. Sources cited by Bloomberg and The Verge say Ninja Theory (the Hellblade developer), Double Fine (the Psychonauts studio) and Compulsion Games (the makers of We Happy Few and South of Midnight) have been informed they may be shut down or forced to spin off. Employees have been given permission to look for new work while negotiations for possible buy‑outs continue. The move follows an internal “reset” memo from Xbox chief Asha Sharma, highlighting declining revenue, rising costs and a need for better profit margins ahead of Microsoft’s fiscal year‑end on June 30. The timing is notable because Ninja Theory’s new title Senua was unveiled at the recent Xbox Games Showcase, a move some reports say was intended to attract investors for a potential sale. Leadership changes have also been announced, with Xbox Game Studios head Craig Duncan stepping down. Microsoft has not confirmed any of the reports, and the studios’ futures remain uncertain.