Compulsion Games and Another Gaming Studio Might Be Shut Down by Microsoft Soon

Currently, the closure of gaming studios and layoffs within the gaming industry are not particularly surprising, especially when large companies undergo restructuring. Microsoft is no exception, and it appears that two unnamed gaming studios will be shut down over the course of the year.

At least, that's what Mike Straw, one of the representatives of Insider Gaming, reports. In a now-deleted post on Bluesky, he wrote, "I've been told of at least two Xbox studios that are at risk of being closed by the end of the year. One of which would come as a shock to everyone." He then added to his post:

"It wasn't Obsidian or Rare, for those who've asked. I'm working on trying to get more details on how employees are feeling right now. But the situation could become clearer in the coming weeks, depending on what decisions get finalized. Everything is on the table at Xbox."

The news spread quite quickly, and fans began speculating about which studios might potentially be shut down. However, Straw recently posted a few more messages regarding his statement, including comments about rumors of a possible closure of Compulsion Games or Arkane Studios, as you can see below:

“That original post was really stupid of me. I apologize, and

I shouldn't have done that. I should be better than to be cryptic with topics like these, and it won't happen again.”

In turn, Kotaku shared a recent report stating that Xbox plans to shut down the studio Compulsion Games, which is one mentioned by Mike Straw. The studio is best known for the game South of Midnight, which last month was the big winner at the Canadian Game Awards, by winning seven awards—including Game of the Year. It is reported that this decision was made in advance despite numerous layoffs within the studio and financial issues. However, Microsoft has not yet made any official announcement, so the report should be taken with a grain of salt.

This isn't the only announcement regarding Microsoft and Xbox that surfaced today. The Game Business has confirmed that Craig Duncan, head of Xbox Game Studios, has left his position after serving less than two years.

Are you disappointed that Microsoft might shut down two gaming studios this year and Compulsion Games might be one of them? Share your thoughts in the comments below!