As Xbox continues its plans for a “reset” of its business, more details have emerged about the company’s decision to divest itself of four studios – Compulsion Games, Undead Labs, Double Fine Production, and Ninja Theory. According to Christopher Dring of The Game Business, State of Decay 3 developer Undead Labs was seemingly in line to be acquired by Splash Damage of Gears Tactics and Enemy Territory: Quake Wars fame. This deal, however, seemingly fell through.
CCO of Xbox, Matt Booty, had already confirmed that the company was looking into a couple of deals for the ownership of Ninja Theory, both of which unfortunately also didn’t go ahead. According to Dring, this was due to the team’s overall costs being high, deterring potential buyers in the process.
“It’s divested of Double Fine (Psychonauts), Compulsion (South of Midnight) and Undead Labs (State of Decay), which have all been returned to independence. At one point, Undead Labs was being acquired by UK developer Splash Damage (Gears Tactics), which is funded by Emona Capital (Emona also funds UK publisher Secret Mode and Canadian developer Relic). But that deal didn’t complete.
“The fourth studio is Ninja Theory. It also had two buyers at one point, but both deals fell through. I know two investors that looked at Ninja Theory, and they both told me the cost of the team was high, which ultimately deterred them.”
As for what will become of Ninja Theory, the Hellblade series developer isn’t in immediate threat of being shut down just yet. Due to the UK’s laws regarding labor, the studio has instead been put under a six-week consultation period, during which Xbox will continue to pursue a deal for its acquisition. In the meantime, the studio will continue to work on Senua, which has been described as “a significant step-up on Hellblade 2.”
In the meantime, Xbox is also continuing the consultation period for Arkane Lyon, which is set to continue until the end of the year.
Xbox had initially announced its plans to release the four studios back in July as part of its larger reorganization efforts, resulting in layoffs affecting 1,600 of its employees across various teams and studios. Division CEO Asha Sharma said that the decision was made due to Xbox’s business health being poor from the company having over-extended itself with acquisitions, and many of those investments not quite paying off.
The reorganization efforts have continued, with the company having announced 268 more job cuts earlier this week. Along with this, Xbox has also moved teams around, with its biggest decision being to take the Halo franchise from Halo Studios and give it to Activision. The Call of Duty publisher will also be in charge of World’s Edge and Rare – the studios behind Age of Empires and Sea of Thieves, respectively. Grounded 2 and The Outer Worlds 2 developer Obsidian Entertainment has been brought under Bethesda, while Turn 10 Studios is being merged with Playground Games.
Rumors have indicated that a new Halo project under Halo Studios was still many years away from being shipped, which led to the decision to hand the franchise over to Activision instead.
