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Xbox Is Closing Ninja Theory, and Double Fine and Compulsion May Not Be Far Behind

  • Microsoft is reportedly planning to shut down Montreal-based Compulsion Games, the developer behind last year's award-winning South of Midnight.
  • Amid financial struggles, Xbox CEO Asha Sharma and chief content officer Matt Booty warned of a company 'reset,' citing an overextended studio system that has failed to adequately fund key franchises.
  • Potential layoffs could impact more than 90 staff, while Xbox Game Studios head Craig Duncan resigned today, just hours after South of Midnight won a Peabody Award.
  • Although details remain undisclosed, Compulsion leadership is currently in 'negotiations' with Microsoft over the studio's fate as staff members post on social media seeking new employment.
  • Sharma aims to reassess investment priorities for the next five years as Microsoft addresses a 3% profit margin and declining annual revenue across its gaming business.
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Xboxdynasty broke the news on Sunday, June 14, 2026.
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