Microsoft Xbox faces studio closures and July layoffs amid cost‑cutting

Microsoft’s Xbox division is reported to be considering the shutdown of three internal studios—Ninja Theory, Compulsion Games and Double Fine Productions—while also planning a major layoff wave slated for July. The studio closures would affect acclaimed developers known for titles such as Hellblade, We Happy Few and Psychonauts. The layoffs, cited by Bloomberg, could involve hundreds of employees across engineering, marketing and other gaming functions and follow earlier reductions as the company refocuses on cloud gaming and AI‑driven development. Xbox executives have not commented, but Satya Nadella said the firm “remains focused on long‑term innovation in the gaming space.” The moves signal a broader realignment of Microsoft’s gaming strategy as competition from Sony and Nintendo intensifies.