This article covers a developing story. Keep checking back with us as we will add more information as it becomes available.
On a recent episode of The Game Business Show, editor-in-chief and co-founder Christopher Dring reported that Obsidian and “some of the Bethesda studios” are currently negotiating with Microsoft to avoid closure.
Dring explained that Asha Sharma's appointment – to take over from Phil Spencer as CEO – was initially met with skepticism, but things “turned around quickly” thanks to a series of eye-catching announcements such as lowering the price of Game Pass and making certain first-party titles exclusive. A company executive even told us that Sharma “brought hope back to Xbox.” Unsurprisingly, amid mass layoffs and reports of studio closures in what some have described as a “bloodbath,” the mood has changed.
“Xbox is looking to redistribute where they spend money,” Dring continued. “The company wants to invest in its big franchises like Halo and Gears and Fallout and all that. And to do that it has to cut from somewhere else. So studios like Compulsion, Ninja Theory, Double Fine, Obsidian, Undead Labs, some of the Bethesda studios as well, are deep in negotiations with Microsoft to avoid negotiations.”
Dring further explained that even if Obsidian had performed well in 2025, it would not have mattered. Avowed and The Outer Worlds 2 could have sold five times as many copies as they did, and “it wouldn't have made up for the decline of Call of Duty.”
“Candy Crush and Minecraft and Warcraft, all those big Xbox games, they make a lot of those smaller titles seem completely insignificant,” Dring said. “And that's why some people think it's pointless to train to get rid of studios like Double Fine.”
This article covers a developing story. Keep checking back with us as we will add more information as it becomes available.
