Xbox is reportedly closing Ninja Theory, the Cambridge, England studio responsible for the Hellblade series. According to people familiar with the situation, staff were told about the decision on Monday — barely a week after the studio took the stage at the Xbox Games Showcase to reveal Senua, the next installment in the franchise. The studio is said to be searching for a buyer, but employees have already been cleared to begin looking for new jobs elsewhere.
The timing has landed hard. Senua's reveal was meant to signal a fresh chapter for the team and for fans of the series, and instead the announcement now sits next to a reported shutdown. Whether the new project survives under different ownership or gets shelved entirely is, for now, an open question.
A Wider Xbox Studio Reset Is Underway
The reported closure isn't an isolated move. Double Fine, the San Francisco studio behind Psychonauts, and Montreal's Compulsion Games, maker of South of Midnight, are both said to be in active talks to spin off from Xbox. Employees across the affected studios have been told they're free to seek other work, though their actual status remains unsettled while the negotiations play out.
Taken together, the three studios point to a deliberate trimming of Xbox's first-party lineup rather than a one-off decision. Each built a reputation for distinctive, critically respected games — and each now finds itself on the wrong side of a restructuring focused on commercial performance.
Leadership Shifts Behind the Restructuring
The shake-up coincides with major changes at the top. Xbox Game Studios head Craig Duncan left the company on Monday, the same day staff at the affected studios received word. The broader reorganization is unfolding under new Xbox CEO Asha Sharma, who took the role after longtime Xbox chief Phil Spencer departed earlier this year.
Sharma is reported to be concentrating Xbox's energy on its biggest franchises as Microsoft pushes to return to growth. That emphasis helps explain why smaller studios known for prestige titles rather than blockbuster sales appear to be the ones most exposed. Microsoft has not commented publicly on the reported closures.
Ninja Theory's Complicated Run Under Microsoft
Microsoft acquired Ninja Theory in 2018, and the studio's most recent major release was Senua's Saga: Hellblade II, which arrived in May 2024. The game earned strong marks for its visuals and audio design, but reviewers also flagged its short runtime and limited gameplay. That mixed reception mirrors a recurring theme across the studios now reportedly being cut loose.
Like Double Fine and Compulsion Games, Ninja Theory developed award-winning titles that didn't translate into commercial hits. Under the new Xbox leadership, that pattern of critical praise without strong sales appears to have counted against the studio — a sign of how much the company's priorities have shifted toward franchises that can reliably drive revenue.
What It Means for Senua and Hellblade Fans
For longtime followers of the series, the whiplash is hard to ignore. The same Senua reveal that generated excitement at the Showcase now hangs in uncertainty. If a buyer steps in, the project could continue under a new owner. If no deal materializes, the game's future becomes far less certain. Until Microsoft says more, fans are left waiting to learn whether the next Hellblade chapter moves forward or quietly disappears.