Earlier today, word broke that Microsoft is reportedly planning to close Compulsion Games–the studio behind South of Midnight, We Happy Few, and Contrast–as part of a larger round of layoffs and studio closures. Now, there’s word that a handful of Xbox Studios‘ smaller developers are taking some steps to avoid that fate.
Bloomberg is reporting that Compulsion, Double Fine, Ninja Theory, and „several other studios“ have started negotiations with Microsoft to spin off their companies from Xbox Studios and avert full studio closures. Potentially, this would give the studios a chance to buy out Microsoft’s stake in their companies or allow them to find financial backers who could become the new owners.
However, that may not be enough to save every developer at the affected studios. Bloomberg notes that „many employees will likely lose their jobs as a result“ of going independent. Consequently, employees at some of the studios have reportedly been cleared to begin looking for other work. It appears this process may be further along at Ninja Theory, with The Verge reporting Microsoft has already opted to close the studio.
The scope of the potential layoffs isn’t clear, and there have even been reports that Microsoft is considering spinning off Xbox itself into a new standalone company. Microsoft CEO Satya Nadella recently stressed the need for the Xbox gaming division to pull its financial weight.
Ahead of any big changes to Xbox itself, Craig Duncan, the head of Xbox Game Studios, has left the company after a 15-year stint with Microsoft. Duncan’s chief of staff, Louise O’Connor, is also leaving Xbox.