Report: Xbox Prepares for Potential Studio Closures and Restructuring

Microsoft's gaming division may soon undergo significant downsizing. According to a report by Bloomberg journalist Jason Schreier, Xbox is preparing to part ways with at least three internal teams. The threat of closure currently looms over Compulsion Games, Double Fine Productions, and Ninja Theory. Sources indicate that all three of these studios are actively negotiating with Microsoft in hopes of avoiding complete closure. Their goal is to buy themselves out from the corporation and secure their independence. However, the report notes that even if these buyout negotiations succeed, major layoffs will still occur within those studios.

The restructuring may extend even further across the division. Schreier claims that Xbox might close several more studios, leaving even the most commercially successful teams uncertain about their future. Employees reportedly fear they could suffer due to a push from Xbox leadership to increase division profitability by focusing primarily on the biggest franchises. Additional details from Insider Gaming reporter Mike Straw suggest that Arkane Lyon, the team currently developing Marvel's Blade, is also on the potential closure list. Earlier reports from The Information highlighted the risk of a large-scale restructuring for Xbox, suggesting Microsoft could potentially turn the division into a separate subsidiary or explore a complete sale.

Meanwhile, widespread restructuring is also underway at Ubisoft following an internal company letter. Ubisoft has decided to close two facilities, specifically Ubisoft Belgrade in Serbia and Ubisoft Winnipeg in Canada. Furthermore, Ubisoft Barcelona will be reorganized to concentrate exclusively on the Rainbow Six franchise, while the San Francisco and Montréal studios will face major workforce impacts. The San Francisco branch will experience mass layoffs affecting dozens of marketers and engineers, and 170 employees at Ubisoft Montréal will be moved off Rainbow Six projects and reassigned internally. In total, Ubisoft is parting ways with 380 employees, representing about 2.3 percent of its overall workforce.