Compulsion and Double Fine Face Closure in Latest Xbox Layoffs
Xbox is heading into a difficult summer as reports surface that Compulsion and Double Fine are on the brink of closure. The news comes as part of a fresh round of layoffs at the publisher, impacting studios that have struggled to turn their recent projects into commercial hits.
The situation appears to be a direct result of shifting corporate goals. Bloomberg reporter Jason Schreier recently detailed how Xbox-owned studios were previously given a very different set of instructions. According to Schreier, the internal mandate for years was not focused on individual profitability, but rather on padding out the Game Pass library with high-quality, award-winning titles.
A Shift in Corporate Mandate
“We've seen a lot of games from the Xbox that have not been profitable, games like South of Midnight and Keeper,” Schreier noted in his recent report. “But I think it's worth noting and hopefully having a little bit of empathy for these studios and the people who work there, because the messaging from above has just changed so much over the last five years.”
Schreier explained that because modern game development takes four to five years, projects greenlit under the “Game Pass is the north star” philosophy are now being judged by a new, stricter standard. Studios that spent years focusing on critical acclaim and subscription value are now facing consequences for failing to meet profit metrics that weren't the priority when their projects began.
Studios Caught in the Crossfire
The impact of this pivot is widespread. Obsidian Entertainment, which bolstered the Game Pass catalog with Avowed, Grounded 2, and The Outer Worlds 2 last year, is also expected to be caught in the upcoming layoffs despite delivering three major open-world releases.
Similarly, Compulsion is fighting for its future despite the critical success of South of Midnight, which secured honors at The Game Awards, DICE, and the BAFTAs. Even studios actively planning for the future are not immune; Ninja Theory is reportedly facing potential closure despite only revealing a new Senua project just days ago. As the Xbox layoffs continue to unfold, the industry is witnessing the fallout of a strategy that traded long-term commercial sustainability for immediate subscription growth.