- Primary Subject: Xbox Gaming Division Restructuring
- Key Update: Microsoft is considering widespread layoffs and studio closures, including Arkane, Compulsion Games, and Ninja Theory.
- Status: Reporting
- Last Verified: 2026-06-30
- Quick Answer: Xbox is reportedly planning significant layoffs and potential studio closures within its gaming division.
Xbox is considering shutting down a few important studios under its umbrella, including Arkane, which is currently working on the upcoming Blade game.
The information comes via The Verge. The site states that Microsoft is working on layoffs and potential studio closures or mergers that will reduce the staff employed by Xbox. Among the big games targeted by Xbox heads is Blade, which has been in development for over four and a half years.
Arkane isn’t the only studio in Xbox’s crosshairs, as Compulsion Games, the team behind South of Midnight, and Ninja Theory, the makers of the critically acclaimed Hellblade series, are also on the chopping block.
In total, The Verge reports that upwards of 1,000 jobs could be cut amid studio closures and widespread layoffs in Microsoft’s gaming division.
The writing was on the wall when CEO Asha Sharma stated that difficult decisions had to be made in order to steer Xbox in the right direction. Among those, cutting projects and studios that were deemed not necessary in order to maximize profits
If layoffs are confirmed, The Verge expects them to be announced starting next week, around July 6. Between this and the recent price increase to Xbox consoles, it’s definitely not the best time to be a fan of Xbox.
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