The Xbox house is on fire right now. Studio closures, mass layoffs, and game cancellations are reportedly hitting most parts of the platform around July 6, and the list of projects in danger keeps growing. But Hideo Kojima's horror collaboration OD is not on it.
A source familiar with Microsoft's Xbox plans has confirmed that OD remains in active development at Kojima Productions and will still be published by Xbox. For a project that has barely shown its face since a 2022 announcement, that's meaningful news.
What we actually know about OD
OD was first announced during an Xbox showcase in June 2022. Since then, information has been sparse. The game stars Sophia Lillis, Hunter Schafer, and the late Udo Kier, and is being developed in collaboration with director Jordan Peele. That combination alone makes it one of the more intriguing projects in Xbox's lineup, even if almost nothing has been shown.
In a recent interview, Kojima described the pitch process as difficult. Most people he spoke to didn't understand what OD was trying to be. Former Xbox CEO Phil Spencer was the exception, and that mutual understanding is what locked in the partnership between Kojima Productions and Xbox.
Here's the thing: that kind of creative alignment is rare, and it explains why OD appears to be protected even as the broader Xbox portfolio gets trimmed.
The studios that aren't as lucky
The cuts hitting Xbox right now are not minor adjustments. At least five studios are reportedly in serious danger: Arkane, Compulsion Games, Double Fine, Ninja Theory, and Undead Labs. Compulsion Games, the developer behind South of Midnight, has already seen layoffs. IO Interactive announced layoffs after Microsoft pulled funding from the studio's Project Fantasy RPG.
Marvel's Blade, the Arkane-developed action game announced in 2023, is reportedly on the chopping block despite Todd Howard publicly stating in May that he had seen the game and that Arkane was doing a "really, really great job." That gap between internal praise and external reality says a lot about where Xbox's priorities are shifting.
Microsoft's official line is that it is not reducing overall investment in games, but is changing "where we're investing and the kinds of projects we're backing." New CEO Asha Sharma is overseeing what looks like a painful portfolio reset.
For fans of cooperative survival shooters, this wave of uncertainty hits close to home. Back 4 Blood came from Turtle Rock Studios, a team that knows what it means to build something ambitious under shifting publisher conditions. That kind of institutional pressure on developers is exactly what makes news like OD's survival feel significant.
Why OD staying alive matters beyond Kojima fans
OD is not just a prestige project for Xbox. It represents a specific kind of bet: that console-exclusive horror, made by a director with complete creative freedom and a Hollywood-caliber cast, can carve out space in a market that doesn't have many direct comparisons.
The key here is that Kojima Productions operates independently. It is not an internal Xbox studio, which likely insulates OD from the same structural pressures hitting first-party teams. The publishing deal survives even when the organizational chart around it gets redrawn.
What most players miss in coverage like this is the downstream effect on game diversity. When studios like Ninja Theory or Double Fine face closure, it's not just headcounts that disappear. It's the specific kinds of games they make, games that don't fit neatly into shooter or live service frameworks, that vanish with them.
OD surviving doesn't fix that problem. But it at least keeps one genuinely strange, ambitious project on the board.
For players who want to stay sharp on co-op survival mechanics while waiting for more OD news, the Back 4 Blood guides cover the game's full progression system in detail. Broader gaming guides across the site are updated regularly as the Xbox situation continues to develop.
