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Microsoft’s gaming division, led by Asha Sharma, announced this Monday (06) that the company is negotiating to divest five studios: Ninja Theory, Double Fine, Undead Labs, Compulsion Games, and Arkane Studios. Alongside the plan, 3,200 employees will be laid off by the end of the 2027 fiscal year.
Which studios are leaving the Microsoft ecosystem?
As part of what the company terms a “cultural reset,” Microsoft is shifting its operational strategy to divest five distinct studios. According to Asha Sharma, Double Fine and Compulsion Games are set to return to independent status, retaining their full game catalogs and intellectual property rights.
The transition for other studios follows a different path. Ninja Theory and Undead Labs are currently being sold to undisclosed buyers. Microsoft has confirmed that active projects, specifically Senua and State of Decay 3, remain in development with secured funding, mitigating risks of cancellation for these titles.
What is the status of Arkane Studios?
The situation at Arkane Studios is currently undergoing a mandatory consultation process. According to the company, management is engaging with the studio’s Works Council to evaluate strategic options. As of the May 6 announcement, Microsoft has not disclosed whether this process will impact the development of Marvel’s Blade or if the title faces potential cancellation.
How will this impact Microsoft’s internal structure?
Asha Sharma stated that Mojang, the developer behind Minecraft, and King, the makers of Candy Crush, will now report directly to her. Sharma identified these two entities as the company’s platforms with the highest volume of monthly active users.
What are the implications for the workforce?
The restructuring includes a significant reduction in headcount. Microsoft reported that 3,200 employees will be laid off by the end of the 2027 fiscal year. The company indicated that further job cuts are expected throughout this three-year period as the “cultural reset” continues.
Frequently Asked Questions
- Are Senua and State of Decay 3 cancelled? No. According to Microsoft, both projects have secured funding to reach completion despite the sale of their respective studios.
- Will Arkane Studios be sold? The studio is currently in a mandatory consultation process with its Works Council to determine its future, but a final decision has not been announced.
- How many people will be laid off? Microsoft plans to reduce its workforce by 3,200 employees by the end of the 2027 fiscal year.
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