The Initiative, which is based in Santa Monica, California and headed by ex-Crystal Dynamics head Darrell Gallagher. Forza Horizon developer Playground Games has been acquired by Microsoft Games Studios, and is now working on a separate open-world adventure. Also, Undead Labs, Ninja Theory, and Compulsion Games.

With all five joining the existing family of Microsoft Studios that includes 343 Industries, The Coalition, and Rare, today's announcement has Microsoft doubling its game development studios. Ninja Theory as an internal Microsoft studio is an interesting one, and exciting due to the success it found with the story-driven and cinematic Hellblade. A sentiment that extends to We Happy Few developer Compulsion Games.

And with State of Decay 2 finding over two million players since launching a few weeks ago, the addition of Undead Labs should mean that we'll get to see more ambitious updates to the game.

The original games we create at Microsoft Studios are some of our biggest assets,” said Matt Booty, corporate vice president of Microsoft Studios. “Our growth strategy is to continue to expand the worlds that players love, while developing all-new exclusive games that deepen their engagement with our platform. We are thrilled to welcome five new studios into the Microsoft family. We believe these teams have the collective creative power and operational excellence to deliver the next industry game changers.”

At the Xbox E3 briefing Phil Spencer noted that each studio will function independently with Microsoft providing the resources and support needed for their creative visions. With many pointing to Microsoft's lack of first-party investment of late, this is a huge step in the right direction.