Last month, Microsoft allegedly closed down Xbox Entertainment Studios. Today, it looks like they are looking towards Warner Bros. to have them buy out their video production division. This is according to information provided to Hollywood Reporter.
Sources tell The Hollywood Reporter that XES is shopping for a new home and has had preliminary talks with Warner Bros. about possibly becoming a stand-alone entity based at the studio. In that scenario, Warners would look to merge XES with Machinima, the video game-centric YouTube network in which it owns a stake.

A Warner Bros. spokeswoman said that the studio is “constantly having preliminary discussions regarding business opportunities with numerous companies at any given time. A conversation is just that — a conversation.”

Nothing has been confirmed by any party just yet. Even if this deal doesn't go through, Microsoft said that they are continuing with creating some projects such as Halo: Nightfall and a series based on Quantum Break.