Xbox resets on July 6 as Double Fine and Compulsion go independent

Microsoft formalized an Xbox reset on July 6. In the Xbox Wire post, Compulsion Games and Double Fine Productions return to management and transition into independent studios with their IP, catalog, and runway for their next games. Ninja Theory and Undead Labs have entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3.

Arkane’s French management is beginning consultation with its Works Council to review strategic options. Microsoft also says reductions are happening across Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and Xbox Game Studios, while adding that no publicly announced first-party games or projects are being cancelled as part of these cuts.

The Verge reported the broader Microsoft number the same morning: about 4,800 employees, or roughly 2.1% of the company’s workforce. Most affected workers are in commercial sales or Xbox, with about 1,600 Xbox employees impacted that day. The report also says Microsoft plans to eliminate around 20% of Xbox jobs by the end of the financial year.

For players, the immediate change is studio ownership and project risk. Double Fine and Compulsion are no longer staying inside Microsoft’s studio structure. Ninja Theory and Undead Labs are moving toward outside ownership while continuing Senua and State of Decay 3. Mojang and King now report directly to the Xbox chief, reflecting Microsoft’s view of Minecraft and King’s catalog as large player platforms.

The r/Games thread focused less on the word “reset” and more on what happens to teams and IP after the transaction. Some commenters saw independence as a possible creative release for Double Fine and Compulsion. Others questioned whether funding, staffing, and long-term support can survive the same restructuring that removes thousands of jobs. The concrete question is not whether Microsoft says projects are cancelled today, but how much capacity these studios keep after the ownership changes close.