Compulsion, Double Fine, Ninja Theory and several other studios are negotiating with Xbox to avoid closure - Media

The scale of upcoming layoffs in Xbox's gaming division may be significantly more severe than previously thought.

According to a new Bloomberg report, not only the previously mentioned Compulsion Games and Arkane Lyon are at risk of closure, but also other internal Microsoft studios, including Double Fine Productions and Ninja Theory.

According to the publication, Double Fine and Compulsion Games are currently in active negotiations with Xbox about a possible spin-off into independent companies. This scenario is reminiscent of the situation with Toys for Bob, which previously managed to separate from Activision and maintain independence instead of complete closure.

While previous reports mainly concerned Compulsion Games and Arkane Lyon, the appearance of Double Fine on the list came as a surprise. The studio is known for projects such as Psychonauts and Brutal Legend, and had not previously been rumored for possible closure.

Bloomberg sources also claim that Ninja Theory, creators of the Hellblade series, is among the teams trying to find an alternative development path that would avoid the studio's liquidation. Other teams within Xbox Game Studios are also at risk, though their names have not yet been disclosed.

The events are reportedly part of a large-scale Xbox restructuring, which was previously discussed by division CEO Asha Sharma. Last week, Bloomberg reported on impending layoffs, and then news broke of personnel changes in Xbox Game Studios leadership: Xbox Game Studios head Craig Duncan and chief of staff Louise O'Connor left their posts.

Microsoft has not yet officially commented on the information regarding the possible closure of studios or negotiations for their separation.