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Xbox Reset Puts Multiple First‑Party Studios and Games at Risk

Microsoft says it is rebalancing its games business to restore profitability after rising costs and weak monetization.

Overview

  • As of July 1, multiple outlets report that at least five Xbox studios — Compulsion, Double Fine, Ninja Theory, Undead Labs, and Arkane — are being evaluated for sale, spinoff, or closure.
  • GamesBeat and others say Undead Labs is seeking a buyer with about 110 jobs at stake, while The Verge reports Arkane and its Marvel’s Blade project face possible sale or cancellation after schedule slips and budget overruns.
  • Several reports name July 6 as the planned start for a post‑fiscal‑year wave of layoffs that could total roughly 1,000 roles across Xbox and lead to additional job losses at studios that are closed or sold.
  • Studio leaders are pursuing independence or buyers to avoid shutdowns but sources warn those talks could take months and are likely to involve layoffs or disruption to in‑development titles.
  • Unionized workers and the Communications Workers of America have publicly mobilized against the cuts, arguing Microsoft’s recent large investments and executive pay mean the company should protect studio jobs.