Xbox is facing a major restructuring that could close several of its first-party studios, including Obsidian Entertainment. This shift matters because it threatens the development of future titles and changes the landscape of Xbox exclusive content. Teams across the division are reportedly feeling the pressure of these internal negotiations.
Microsoft restructuring puts multiple first-party developers at risk
Obsidian Entertainment is currently negotiating with Microsoft to avoid closure. The studio is part of a broader group of Xbox developers facing similar uncertainty. Other studios at risk include Double Fine, Ninja Theory, Compulsion Games, and Undead Labs. Even Arkane Studios is reportedly at risk, with the game Blade potentially being cancelled as a result.
Christopher Dring reports that there is a real sense amongst some teams that they are being punished for the poor performance of Call of Duty. This internal sentiment suggests that external franchise struggles are influencing internal studio stability. Layoffs are expected to begin on July 6, marking the start of these structural changes.
Neither Xbox nor Obsidian has officially commented on the reports. The situation remains fluid as negotiations continue behind closed doors. Readers should monitor official channels for any confirmed updates regarding studio operations or game cancellations.
Source: Insider Gaming
