[STEAM] Ninja Theory and Double Fine Also Reportedly Under Threat of Closure as Xbox Studios Fight for Survival

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Hellblade developer Ninja Theory and Psychonauts developer Double Fine are reportedly among the studios fighting to avoid closure as

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makes significant cuts to the Xbox business.

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reported that Compulsion, Ninja Theory, and Double Fine are all negotiating with

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to potentially go independent, although doing so would still likely result in significant layoffs.

Earlier today,

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reported that Xbox Game Studios boss Craig Duncan had stepped down, then

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reported that South of Midnight developer Compulsion was under threat of closure. Now, Bloomberg is reporting that pretty much all

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-owned studios are concerned about what happens next, with Ninja Theory and Double Fine named as being in talks with their parent company.

IGN has asked

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for comment.

Just last week, new Xbox boss Asha Sharma warned of a company "reset" that most took as a signal that

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planned big layoffs and studio closures.

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"the studios most exposed are brilliant for prestige and rotten for the spreadsheet."

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was then said to be

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as it considered restructuring or even spinning off its gaming branch.

*** studio Ninja Theory is behind the technically impressive Hellblade games, but they have struggled for commercial success. The developer

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at the

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reveal event. It is unclear what will happen to the game now. Earlier this year Double Fine, which is behind the Psychonauts franchise, released online multiplayer pottery party brawler Kiln, but it failed to make an impression. Last year it released adventure game Keeper.

Sharma's ground-shaking memo revealed that

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's gaming business currently has a 3% accountability margin (assumed to mean profit margin), which is down year-on-year. "Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue," Sharma said.

Following the release of the memo,

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, adding that the Xbox team needed to figure out how to "innovate both in hardware, as well as in the games, going forward in an economically viable way."

"No one can accuse

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of not having invested for the last 25 years," Nadella added. "Now, we have to turn this into a sustainable business that delivers what is fundamentally one of the best sources of entertainment, still."

Today's news marks a significant U-turn on Xbox brand sentiment, after Sharma had started to turn core fans around with a number of crowd-pleasing changes such as the decision to make The Coalition's Gears of War: E-Day and inXile's Clockworld Revolution console exclusives. The Xbox layoffs are expected to come into effect at the end of

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's financial year on June 30.

Wesley is Director, News at IGN. Find him on

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at @wyp100. You can reach Wesley at [email protected] or confidentially at *****@*****.tld.

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