Xbox Announces Studio Closure and Executive Departures Amid 'Reset'
Microsoft's Xbox division is facing significant turmoil as it moves forward with studio closures and internal restructuring. According to reports, Xbox plans to shut down Compulsion Games, the studio behind the action-adventure game South of Midnight.
The closure comes after Xbox boss Asha Sharma sent a memo to staff warning of an Xbox "reset" ahead of expected layoffs. In the memo, Sharma and chief content officer Matt Booty acknowledged that the business had "over extended" with its studio system, a candid admission about the challenges facing the gaming division.
Since taking over in February, Sharma has implemented several major changes, including reducing the price of Xbox Game Pass and converting games like Gears of War: E-Day and Clockwork Revolution into Xbox console exclusives. The Compulsion Games closure represents one of the most visible outcomes of the company's efforts to streamline its operations.
The restructuring reflects broader pressures in the gaming industry, where major publishers have been seeking to reduce costs and focus on more sustainable business models after a period of aggressive expansion.