Microsoft Xbox to close four studios and begin ZeniMax layoffs

Microsoft’s Xbox division is preparing to shut four development studios as part of CEO Asha Sharma’s 100‑day restructuring plan that follows the fiscal year end on June 30. The studios at risk include the UK‑based Ninja Theory, Canada’s Compulsion Games, Tim Schafer’s Double Fine in the United States, and France’s Arkane Lyon. Sources say the company is also negotiating the possible independence of Compulsion Games and Double Fine to avoid outright closure, while employees of the affected teams have begun seeking new positions.

Layoffs have already begun at ZeniMax Media, the parent of Bethesda Game Studios, id Software, Arkane Lyon and MachineGames. Insider George Broussard posted on X that he had “received news that layoffs at ZeniMax have started” and that cuts may be deeper than expected, with rumors that only staff working on Elder Scrolls or Fallout titles will be spared. The move could affect dozens of projects, including the upcoming Hellblade sequel from Ninja Theory, and marks a significant scaling back of Microsoft’s recent gaming acquisitions.