Overnight reports indicate Microsoft is seeking a buyer for Undead Labs, with its zombie survival title at risk of cancellation if none is found. The move is part of broader layoffs threatening hundreds of jobs across Xbox gaming studios including Double Fine, Compulsion, and Ninja Theory.
If no buyer emerges, the survival game may be canceled.
Ninja Theory management may not have even been aware of the plan.
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Xbox confirmed it is eliminating 268 roles across Halo Studios, other first-party studios, and the XGS management layer, and is reorganizing studios so Activision develops the next Halo while Obsidian moves under Bethesda. Official Xbox Wire says the company is roughly three-quarters through its previously announced 3,200-role restructuring.
Hideo Kojima revealed he learned of Sony's decision to cancel funding for Physint during a June Zoom call, leaving him in shock and immediately concerned for his studio's 200 employees and its 10th anniversary. The news comes after PlayStation publicly stepped away earlier this month and Xbox took over the project, highlighting the tough conditions across the game industry.
Hideo Kojima confirmed Bill Skarsgård as the lead actor in Physint and said development on OD is on schedule during an Xbox Tokyo Game Show 2026 presentation on September 17. The update is the first since Xbox took over publishing both games following Sony's departure from Physint last week.
Sony's September 3, 2026 State of Play confirmed multiple third-party games for Xbox consoles with firm release dates through 2027. The announcements reassure Xbox owners that the PlayStation-focused showcase still delivered relevant multiplatform news.
Microsoft has acknowledged a major Xbox Network outage preventing users from signing in, creating accounts, or launching profile-required games on PC and consoles. The disruption comes after two months without issues and follows a prior outage that lasted more than 15 hours.
