Xbox is reportedly in advanced discussions to spin off several of its internal studios in order to avoid their outright closure. According to new information reported by Bloomberg and The Verge, Microsoft is reportedly considering turning certain studios into independent entities or facilitating their acquisition, amid an increasingly tense restructuring effort.

The studios concerned reportedly include Ninja Theory, Double Fine Productions and Compulsion Games. This strategy would allow Xbox to reduce its costs without directly carrying out abrupt closures, as new waves of layoffs are reportedly being discussed internally. Veteran developer Chris Avellone recently stated that even teams previously considered relatively protected are now being informed that they may be at risk.

The case of Ninja Theory is attracting particular attention. The studio, which has just announced a new project, was reportedly warned that Microsoft was considering shutting it down, while leaving open the possibility of an acquisition. This situation is fueling concerns about the creative future of several organizations nevertheless recognized for their strong identities and distinctive productions.

These rumors emerged shortly after the publication of an ambitious memo from Xbox CEO Asha Sharma calling for a genuine "reset" of the brand. For its part, Microsoft's leadership recently stressed the need for the Xbox division to become sustainably profitable. In the same context, Craig Duncan, head of Xbox Game Studios, announced his resignation, although the decision was reportedly made before the internal discussions surrounding the layoffs.