Xbox turmoil continues with a studio closure and executive departures

Live updates

1. 23m ago

   Xbox accelerates overhaul with studio shutdown and top executive exits

   Microsoft’s Xbox division has shut down Compulsion Games and seen two senior leaders depart, signaling deeper restructuring under CEO Asha Sharma. Leadership admits the company is overextended and plans a major rethink of its studio strategy, with further layoffs and potential closures expected. Financial struggles remain the driving force behind the changes, though no official confirmation of Arkane Lyon’s status has emerged. Sources suggest the division is preparing for a broader reset.

   What's confirmed:

   • The head of Xbox Game Studios departed the company shortly before Microsoft shut down Compulsion Games.
   • Xbox leadership has admitted the division became overextended and requires a major rethink of its studio strategy to strengthen its biggest franchises.
   • CEO Asha Sharma has signaled significant layoffs and a potential 'reset' within the division.
   • Compulsion Games, a Peabody-winning studio, has been closed as part of the restructuring.

   Still unconfirmed:

   • Further studio closures, including Arkane Lyon, are expected but not yet confirmed.
   • Budget cuts are being implemented across Xbox Game Studios, though specifics remain unclear.
   confidence 95%
2. 12h ago

   Xbox shuts Compulsion Games, ousts top execs amid restructuring

   Microsoft’s Xbox division is closing the Peabody-winning Compulsion Games studio and cutting jobs, while two senior leaders—Craig Duncan and Louise O’Connor—have left the company. The moves mark a deepening restructuring under CEO Asha Sharma, with reports of further layoffs and studio closures. Arkane Lyon remains under threat, and budget cuts are expected across the division. Sources suggest financial struggles are driving the overhaul.

   What's confirmed:

   • Microsoft’s Xbox division is shutting down Compulsion Games studio, which won a Peabody Award.
   • Craig Duncan, Head of Xbox Game Studios, has resigned amid the restructuring.
   • Louise O’Connor, a veteran of Rare, is also leaving Xbox.
   • Major layoffs are planned across Xbox, with reports of a broader budget-cutting initiative.
   • Arkane Lyon faces potential closure, though no official announcement has been made.

   Still unconfirmed:

   • Sources suggest the departures and closures are part of a 'bloodbath' under CEO Asha Sharma, though the term is not directly attributed.
   confidence 92%
3. 15h ago

   Xbox Shuts Down Compulsion Games, Layoffs Near as Leadership Exits

   Microsoft’s Xbox division is shutting down the Peabody-winning Compulsion Games studio and preparing for major layoffs, with two senior executives departing. Arkane Lyon faces closure fears, and broader budget cuts are expected. The moves signal a sharp restructuring under CEO Asha Sharma amid financial struggles.

   What's confirmed:

   • Microsoft’s Xbox division has confirmed the shutdown of Compulsion Games, the studio behind *South of Midnight*, despite its Peabody Award-winning work.
   • Craig Duncan, head of Xbox Game Studios, and Louise O’Connor, Chief of Staff, are leaving their roles as part of leadership changes.
   • Xbox plans to announce significant layoffs—potentially affecting around 1,000 employees—shortly after Microsoft’s financial results on 30 June 2026.
   • Budget cuts are expected, particularly in marketing, as Xbox reassesses its strategy and prioritizes exclusive game development.
   • Arkane Lyon’s future is uncertain, with reports claiming the studio fears closure amid the broader restructuring.

   Still unconfirmed:

   • Two additional Xbox studios are reportedly at risk of being closed in 2026, though no names have been confirmed.
   • Microsoft’s gaming division is undergoing a 'major internal reset' under CEO Asha Sharma, with further studio closures possible.
   confidence 95%