Microsoft’s Xbox division is reportedly preparing to close Ninja Theory, the British game studio best known for the Hellblade series.
Employees were reportedly informed about the decision during an internal call on Monday. However, the studio may still have a chance to continue operating if it can find a buyer or negotiate its independence from Microsoft.
The report has surprised players because Ninja Theory revealed its next game, Senua, at the Xbox Games Showcase only days earlier. The announcement had suggested that the studio remained an important part of Xbox’s future plans.
Xbox has not publicly confirmed the closure at the time of writing.
Ninja Theory Employees Were Reportedly Told About the Closure
According to a report from The Verge, Ninja Theory staff members were informed that Xbox plans to shut down the studio.
The closure may not happen immediately. Employees are reportedly hoping that another company will acquire Ninja Theory before Microsoft completes the process.
A sale could allow the developer to remain open and continue working on its current projects. However, there is no confirmed buyer, and Microsoft has not explained what will happen to the studio’s employees or games.
Reports also suggest that Microsoft-owned studios Double Fine and Compulsion Games are holding discussions about separating from Xbox. These negotiations could allow the studios to become independent or move under different ownership rather than close completely.
The final outcome may therefore depend on whether Microsoft and potential buyers can reach an agreement.
What Will Happen to the New Senua Game?
The biggest unanswered question concerns Senua, Ninja Theory’s recently announced action-adventure game.
Xbox unveiled Senua during its Games Showcase on June 7, 2026. The game takes place in the Hellblade universe and continues the journey of its central character, but Ninja Theory has described it as a different experience rather than simply calling it Hellblade 3.
The announcement showed a more ambitious game with expanded combat, exploration and environmental puzzles. Ninja Theory had reportedly brought its full development team together to work on the project.
Its future is now uncertain.
Microsoft could retain the game and transfer development to another team. A buyer could acquire Ninja Theory and continue working on Senua, although the ownership of the game and Hellblade intellectual property would need to be decided.
The project could also be delayed or cancelled if no agreement is reached. Xbox has not provided an update about its development status.
For now, players should not assume that Senua has been cancelled. The closure itself remains based on reports, and discussions surrounding the studio’s future may still be taking place.
The Timing Has Surprised Hellblade Fans
The reported decision comes shortly after Ninja Theory received major attention at the Xbox Games Showcase.
Microsoft promoted Senua as one of the event’s notable announcements, making the possible closure especially unexpected. It is unusual for a publisher to reveal a major project and then reportedly tell the developer about plans to close it just over a week later.
Ninja Theory had also cancelled its experimental horror project, Project: Mara, to concentrate more of its resources on Senua. That decision suggested that the studio was preparing to focus heavily on a single major game.
The latest reports now raise questions about how long Microsoft had been considering the closure and whether the showcase announcement was made while negotiations were already underway.
Neither Microsoft nor Ninja Theory has publicly addressed those questions.
Why Is Xbox Restructuring Its Studios?
The reported closure appears to be part of a wider restructuring across Microsoft’s gaming business.
Xbox leaders have reportedly discussed the need to reset parts of the division after expanding its collection of studios and game projects. Microsoft has invested heavily in gaming through major acquisitions, including Bethesda parent ZeniMax Media and Activision Blizzard.
Owning a large number of studios also creates higher development, staffing and operating costs. Games now take longer and cost more to produce, while not every release delivers the commercial results expected by a large publisher.
Microsoft has already closed or restructured several game studios in recent years. This has created growing concern among developers and players about the future of smaller, creatively focused teams within Xbox.
Ninja Theory is particularly known for story-driven games that may not sell at the same level as franchises such as Call of Duty, Minecraft or The Elder Scrolls. However, the studio has developed a loyal audience and received praise for its performance capture, sound design and portrayal of mental health experiences in the Hellblade series.
Other Xbox Studios May Also Be at Risk
Ninja Theory is not the only developer mentioned in reports about Xbox’s latest changes.
Double Fine, the studio behind Psychonauts, and Compulsion Games, the developer of South of Midnight, are reportedly exploring ways to leave Microsoft or regain their independence.
These discussions do not necessarily mean that every studio will close. A spin-off agreement could allow a team to continue operating while Microsoft reduces its financial involvement.
Tango Gameworks offers a recent example of how a studio can survive after Microsoft decides to close it. The Hi-Fi Rush developer was later acquired by Krafton and continued operating under new ownership.
A similar outcome may be possible for Ninja Theory, but there is no guarantee that a buyer will emerge.
Who Owns Ninja Theory?
Ninja Theory was founded in 2000 and is based in Cambridge, England. The studio developed games including Heavenly Sword, Enslaved: Odyssey to the West, DmC: Devil May Cry and Bleeding Edge.
Microsoft acquired Ninja Theory in 2018 as part of an expansion of Xbox Game Studios.
The developer became best known for Hellblade: Senua’s Sacrifice and its sequel, Senua’s Saga: Hellblade II. The series follows Senua, a warrior who experiences psychosis, and was developed with input from mental health experts and people with lived experience.
That distinctive approach helped Ninja Theory build a reputation for combining cinematic presentation with personal storytelling.
Xbox Has Not Officially Confirmed the Decision
The situation remains developing.
The reported closure is based on information from unnamed sources familiar with Microsoft’s plans. Xbox has not yet published an official statement confirming that Ninja Theory will close, and Ninja Theory has not announced that it is ending operations.
Until either company responds, the most accurate description is that Ninja Theory is reportedly facing closure while efforts to find a buyer continue.
The coming weeks could determine whether the studio shuts down, becomes independent or joins another publisher. The outcome will also decide whether the newly announced Senua project continues in its current form.
This article will be updated when Microsoft, Xbox or Ninja Theory releases an official statement.
