Microsoft refutes rumors that it will shut down PC online gaming service Games for Windows Live (featuring achievements, gamertags, etc.) on July 1, but with with its marketplace shut down, it's clearly in decline. Furthermore, studios like Twisted Pixel Games – a developer now owned by Microsoft – are migrating over to Valve's Steamworks instead.

Twisted Pixel has announced that an update to the Steam version of Ms. Splosion Man replaces Games for Windows Live (GFWL) implementation with Steamworks while keeping all of the game's levels and online multiplayer. Furthermore, the studio says that players can convert their GFWL saves over to Steam.

Last fall, Microsoft shut down the service's marketplace, and given its unknown future, companies have begun switching over to Steamworks and ensuring that their games remain playable should Microsoft pull the plug.

We asked Microsoft about the July 1 rumors, and received this statement:

We are continuing to support the Games for Windows Live service. As previously announced, as part of the retirement of Microsoft Points the Xbox.com PC marketplace was closed. Although customers are unable to purchase new games from the marketplace or receive title updates, they can continue to enjoy previously purchased content by downloading them through the Games for Windows Live client as usual. We remain committed to investing in PC gaming in the years ahead, and look forward to sharing more in the future.

Our Take

Regardless of Microsoft's statement refuting the rumored imminent closure of GFWL, it certainly says a lot when one of its own studios decides it needs to get out of Dodge.