As part of today’s layoffs, Microsoft is spinning off four Xbox studios to be run independently.
According to an internal memo acquired by The Verge, Double Fine and Compulsion Games will return to their founders. Ninja Theory and Undead Labs, meanwhile, are also being sold.
Reportedly, there are agreements in place to make sure Senua and State of Decay 3 will ship.
“I know this is painful. These changes will directly affect people who have poured their creativity into building Xbox,” wrote Xbox CEO Asha Sharma.
“Many joined us through acquisitions, while others were recruited here, or sought us out because they loved this industry and loved Xbox. Today’s decisions do not reflect their talent or dedication.”
This still leaves the future of Arkane Studios in doubt. The studio is currently working on Blade, but delays have led to ballooning production costs.
Sharma said there are discussions at Arkane to see what happens next.
“In France, Arkane’s management is beginning required consultation with its Works Council to review potential strategic options,” wrote Sharma.
The hits don’t end here, however. Microsoft is reportedly planning to cut additional Xbox jobs, with 20 percent of employees getting laid off by July 2027.
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