Microsoft wants to shut down three video game studios as a move to reduce operating costs of Xbox Game Studios, as announced by the CEO last week, according to a Bloomberg report. The three studios are Double Fine, which developed Psychonauts, Compulsion Games, which developed South of Midnight, and Ninja Theory, which developed the Hellblade series.
All three studios are believed to be closed, but studio management is in talks with Xbox to allow them to be released and operate as independent studios. Discussions are still ongoing but it will still involve laying off staff.
In a memo sent to employees last week, Xbox CEO Asha Sharma said Xbox is a broken division, burdened by failed investments and a confused strategy. She insisted that this situation cannot continue, indicating that layoffs will be carried out in the near future.
Despite the big spending, annual revenue has fallen by almost $500 million in 5 years. Profits will continue to decline when taking into account the increased costs of producing consoles due to the RAM crisis.
