Xbox has announced a major overhaul of its operations, parting ways with four of its development studios: Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs. This move is accompanied by a significant reduction in workforce, with over 3,000 employees set to be laid off in the coming months.

According to Xbox CEO Asha Sharma, the company's current business model is not sustainable, with margins significantly lower than comparable platform and publishing businesses. Sharma attributes this to a combination of factors, including a smaller install base, higher cost structure, and slower-than-expected growth of certain business segments.

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  • Xbox is letting go of four development studios, allowing them to become independent or be sold to new owners.
  • Compulsion Games and Double Fine Productions will regain their independence, retaining their IP and game catalogs.
  • The company will provide open development tools and audiences to support independent creators.
  • Xbox aims to reset its operations and improve profitability through this restructuring.
  • The layoffs and studio departures are expected to be completed over the next several months.

For more information on this significant development in the gaming industry, Source: Game Informer