Another Xbocalypse begins: Microsoft are reportedly closing or spinning off Double Fine, Ninja Theory and Compulsion
Xbox plan to close or spin off the makers of Psychonauts, Senua and South of Midnight, claims report, as Microsoft try to grow their margins.
Another Xbocalypse begins: Microsoft are reportedly closing or spinning off Double Fine, Ninja Theory and Compulsion is the latest Gaming story from Rock Paper Shotgun. The original report points to Xbox plan to close or spin off the makers of Psychonauts, Senua and South of Midnight, claims report, as Microsoft try to grow their margins. ## The short version - Xbox plan to close or spin off the makers of Psychonauts, Senua and South of Midnight, claims report, as Microsoft try to grow their margins. - Future uncertain for creators of Psychonauts, Senua and South of Midnight Image credit: Xbox News by Edwin Evans-Thirlwell News Editor Published on June 16, 2026 59 comments Follow Kiln Xbox are reportedly closing or spinning off Psychonauts developers Double Fine, Hellblade studio Ninja Theory, and South of Midnight creators Compulsion Games, as Microsoft commence efforts to yet again "reset" their billion dollar gaming business after already laying off thousands of staff , cancelling games , and closing several studios over the past couple of years. - All three studios are apparently now haggling for their continued existence, as the end of Microsoft's financial year looms, with many other Xbox teams said to be affected, and certain employees quietly encouraged to start seeking work elsewhere. - The report comes from Bloomberg , who cite anonymous staff at several studios. - The Verge (paywall) also have an article in which they claim that Ninja Theory are in the process of trying to find a buyer, after being informed that they will be closed on Monday. ## What happened Future uncertain for creators of Psychonauts, Senua and South of Midnight Image credit: Xbox News by Edwin Evans-Thirlwell News Editor Published on June 16, 2026 59 comments Follow Kiln Xbox are reportedly closing or spinning off Psychonauts developers Double Fine, Hellblade studio Ninja Theory, and South of Midnight creators Compulsion Games, as Microsoft commence efforts to yet again "reset" their billion dollar gaming business after already laying off thousands of staff , cancelling games , and closing several studios over the past couple of years. ## Why it matters Gaming readers should care because the story affects a.