Following the conclusion of its Summer Game Fest showcase, Xbox is facing a wave of internal turbulence. Reports have surfaced that the company is planning to close multiple studios, including Compulsion Games, while Ninja Theory and Double Fine are also reportedly at risk.
- Reported Closures: Compulsion Games, with Ninja Theory and Double Fine under threat.
- Leadership Changes: Head of Xbox Game Studios Craig Duncan and Chief of Staff Louise O’Connor have departed.
- Strategic Reset: CEO Asha Sharma and CCO Matt Booty are leading a plan to address a half-billion dollar revenue decline.
- Exclusivity Stance: Future titles like Gears of War: E-Day and Clockwork Revolution remain exclusive.
A Business in Reset
The potential closures follow a memo from new CEO Asha Sharma and CCO Matt Booty titled “Next 100 Days: Xbox Reset.” The leadership team noted that while the company has invested over $20 billion in content, platform, and hardware subsidies over the last five years, annual revenue has declined by nearly half a billion dollars. Sharma and Booty stated that the company had become “over extended” while attempting to execute shifting strategies across subscription and streaming models.
Beyond the potential studio shutdowns, Bloomberg reports that some teams are currently in negotiations to buy themselves out of Microsoft to maintain independence. Additionally, further layoffs are expected following the end of the fiscal year on June 30.
Leadership and Strategy Shifts
The internal restructuring coincides with the departure of two long-term executives. Craig Duncan, who led Xbox Game Studios for 20 months, and Chief of Staff Louise O’Connor have both resigned. In an email regarding his departure, Duncan noted his pride in delivering “flawless launches” during his tenure.
There is also a clear pivot regarding platform strategy. Despite recent trends of bringing Xbox properties to other consoles, the company appears to be doubling down on exclusivity. Matthew Ball, Xbox’s new chief strategy officer, explicitly denied rumors of a course correction on social media, stating that players can continue to expect yearly signature exclusives.
While industry analysts like Joost van Dreunen suggest Sharma’s mandate is to “whip Xbox back into shape,” the internal memo from leadership acknowledges the difficulty of the path ahead. “We have made mistakes, and will continue to make them,” Sharma and Booty wrote. “But what matters is that we listen, learn, and adjust the course where needed.”