Xbox has decided to close Ninja Theory, the studio that brought Hellblade to the industry. Employees were informed of the decision during an internal call on Monday, June 15. The team is now desperately trying to find a buyer who will allow the studio to continue operating outside of Microsoft.
According to The Verge, citing informed sources, the liquidation of the British studio is part of a large-scale “reset” at Xbox, which new CEO Asha Sharma and Chief Content Officer Matt Booty warned about last week. In a published memo, management cited financial difficulties, an overly bloated studio system, and rising console production costs due to the component crisis. Over five years, Microsoft has invested over $20 billion in content and platform development (excluding expenses at Activision Blizzard), yet annual revenue during this period has declined by almost half a billion dollars.
The decision is surprising, given the timeline of events. On June 7, at the Xbox Games Showcase, the studio announced its next major project: Senua (set in 2027, PC, Xbox Series X, and PS5). The project was positioned as a continuation of Senua’s story, but with larger locations and a redesigned combat system. Now, the developers are unsure what will happen to their game.
The news of the closure came on the same day as several high-profile resignations. Head of Xbox Game Studios Craig Duncan and Chief of Staff Louise O’Connor resigned. Duncan, in fact, wrote on LinkedIn just 48 hours earlier how excited he was about the future of Xbox studios.
The Future of Senua: What Will Happen to Ninja Theory’s New Game After the Studio’s Closure
The fate of Senua is the main question troubling fans. There’s no official answer yet, but three plausible scenarios can be identified.
The first option is that the game will still be released, but development will be transferred to another team within Microsoft. The company has experience shuffling projects between studios: for example, the new The Elder Scrolls, Fallout, and Halo games were accelerated amid rumors of a possible spinoff or sale of the games division. Theoretically, Senua could be entrusted to The Coalition (Gears of War) or a major studio like Obsidian Entertainment. But the problem is that an outside team, even a very talented one, is unlikely to recreate Ninja Theory’s unique style.
The second scenario is the most likely at this stage: the studio finds a buyer, and then Senua exits as if nothing had happened. According to Bloomberg and The Verge, the team is already actively negotiating a buyout. If the deal goes through, Ninja Theory will follow in the footsteps of Toys for Bob, which managed to separate from Activision and maintain independence instead of shutting down completely.
But even in this optimistic scenario, there’s an important detail. Any buyout will almost certainly result in layoffs. Bloomberg, citing Jason Schreier, clearly states that going independent will still lead to significant layoffs. Even if the studio isn’t completely liquidated, some employees will likely lose their jobs. Employees have already been given permission to look for new positions—a classic sign that the situation is unstable.
The third scenario is the most dire. If a buyer isn’t found, and Microsoft is unwilling to hand over Senua to third parties, the project could simply be canceled. Right now, this outcome seems less likely: the game was unveiled just eight days ago, which was far too ambitious. But the history of the gaming industry is littered with high-profile cancellations in the late stages of development.
As for already canceled projects, Project Mara—an experimental horror game from Ninja Theory—was officially canceled even before the closure news. Studio head Dom Matthews confirmed that all 85 developers have been transferred to Senua. The game was positioned as “not Hellblade 3,” but a direct continuation of the heroine’s story—the plot takes place after the events of the second game, in purgatory, in “her own vision of the other world.”
Microsoft has not yet responded to journalists’ inquiries. Neither The Verge nor IGN have received official comments from the company.
