News about potential Xbox closures is ramping up by the day, kicking off with a troubling report that the publisher could be on the brink of a historically unmatched series of layoffs. While we don’t have official word yet on which studios are at risk, reports have started to paint a picture of where the major concerns lie.

One of the first big headlines was about Arkane Studios, the company responsible for games like Dishonored and Deathloop and currently deep in production on Marvel’s Blade. Several days later, we have a more extensive list, along with an indication that one legendary studio will actually be safe from the closures.

This morning, an episode of The Game Business Show suggested that Obsidian Entertainment was negotiating to avoid potential closure, but this particular report has since been debunked. According to a Bluesky post from Jason Schreier, “Xbox is keeping Obsidian,” although the overall Xbox lay-off situation won’t be clear until Monday. Schreier has a reputation as an extremely reliable source on the game industry, so this should put fears about Obsidian shutting down to rest for the time being.

However, the list of studios at risk is still concerningly long. The Game Business Show‘s discussion covers other studios that don’t seem to have the same security, with Double Fine, Ninja Theory, Compulsion Games, and Undead Labs all potentially in trouble. None of these names are new to the discussion, but Schreier only weighing in on Obsidian is essentially further confirmation that there’s no indication of security for the rest.

That doesn’t necessarily mean these studios will end up shutting down, as Xbox is reportedly attempting to find buyers before pulling the trigger. In 2024, Xbox subsidiary Tango Gameworks ended up at Krafton after its closure, so there’s always hope for a second life. Nonetheless, it’s shaping up to be a tragic event, and job loss on a large scale currently seems inevitable. It also paints Xbox’s decision-making over the years in a very unflattering light, as investing in this many studios only to close them could certainly have been avoided.

Hopefully, we’ll end up getting some reassuring news about other studios aside from Obsidian. Either way, the answers should all be here next Monday, when Xbox will apparently reveal its mercenary approach to cutting expenses. I’ll be especially heartbroken if Arkane ends up closing, but at this point, I’m just keeping my fingers crossed for any studios to survive the fallout.

Founded

November 15, 2001

Owner

Microsoft

Known For

Halo, Forza, Gears of War