You can add yet another studio at Xbox that appears to be at risk. In a new report from The Game Business, Obsidian Entertainment is currently negotiating with Microsoft to avoid closure.
According to the report, Obsidian joins studios like Double Fine, Ninja Theory, Compulsion Games, and Undead Labs, all of which have been trying to work out deals to avoid closure. Even Arkane Studios is at risk, with Blade possibly being cancelled as a result.
Is It Call of Duty’s Fault?
UPDATE: In a twist to Dring’s report, Jason Schreier is now reporting that Obsidian is NOT one of the at-risk studios at Xbox.
“Despite a report this morning, I can confirm that Obsidian is *not* in negotiations to avoid shutting down. Plenty of details are still up in the air surrounding the layoffs (picture will be clear on Monday) but Xbox is keeping Obsidian, according to people familiar with the situation.”
While details on a potential split from Xbox remain scarce, the report brought up an interesting belief. Christopher Dring writes that there’s “a real sense amongst some teams that they’re being punished for the poor performance of Call of Duty” before explicitly stating “that is the reality.”
Dring says that even if Obsidian’s recent games like Avowed and The Outer Worlds 2 had five times more sales than they did, “it wouldn’t have offset the drop on Call of Duty.”
Xbox nor Obsidian has commented on the numerous reports surrounding the potential closures and expected layoffs. Layoffs are expected to begin on July 6.
How do you feel about Obsidian potentially being one of the studios Xbox is looking to unload? Leave your thoughts in the comments below, or join the discussion in the official Insider Gaming Discord.
In other news, read about Xbox stating that it’s not reducing its investment in games as cuts loom. And for even more Insider Gaming delivered directly to your inbox, sign up for our newsletter.
Mike has been covering the gaming industry since 2012, and has reported on some of the largest events in the industry while also working as an investigative reporter. Outside of…
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Jason Schrier just debunked this, they’re not going anywhere. As for the other companies… maybe?