Xbox parts ways with 4 studios, with South of Midnight and Psychonauts devs going independent as Arkane begins "required consultation" to "review potential strategic options"

Psychonauts 2 main character gasping — (Image credit: Double Fine)

It's been confirmed that four Xbox-owned studios are breaking free from Microsoft ownership amid the "most significant restructure in XBOX history," while "required consultation" begins with management of Arkane.

In a memo sent to Xbox staff today, CEO Asha Sharma reveals that South of Midnight studio Compulsion Games and Psychonauts developer Double Fine are both going independent. Meanwhile, Senua studio Ninja Theory and State of Decay dev Undead Labs will be getting new owners, while management of Marvel's Blade studio Arkane is "beginning required consultation with its Works Council to review potential strategic options."

Sharma writes: "Compulsion Games and Double Fine Productions will return to management and transition to 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."

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