It’s yet another sad day in the games industry as Xbox’s continued gutting of its subsidiaries gets worse, with acclaimed action game studio Ninja Theory headed for the chopping block.
Xbox’s chief content officer and executive vice president Matt Booty took to the official Xbox website on September 22 to announce that the Hellblade studio will go forward with the proposed closure.
“Unfortunately, two separate agreements for Ninja Theory fell through,” Booty wrote. “We will now begin consultation with employees on a proposed closure while continuing to explore other paths forward.”
Ninja Theory has developed several games since its founding in March 2000. You might know the studio for Heavenly Sword, Enslaved: Odyssey to the West, DmC: Devil May Cry, or Bleeding Edge. The studio is now best known for the Hellblade series, with Senua’s Saga: Hellblade 2 launching in 2024. There’s a third entry in the works planned for 2027, but that may be up in the air with considering the studio’s fate.
Although Booty seems to suggest there may be “other paths forward” for Ninja Theory, it appears the plan is to shutter the Hellblade developer–maybe unless another buyer steps forward.
There was a buyer previously, as Xbox CEO Asha Sharma said in July 2026 that Ninja Theory–along with State of Decay 3 developer Undead Labs–had “entered terms to join new ownership with funding.”
It’s worth noting, though, that the language Xbox is using here doesn’t explicitly mean Ninja Theory is closing right this second. Instead, the “consultation with employees” and “continuing to explore other paths forward” are likely in reference to UK law, which requires employers to establish at least a 30-day consultancy period. In that time period, measures to avoid redundancies are to be discussed while giving affected staff time to find new jobs.
At the same time Xbox moves forward with the proposed plan to shutter Ninja Theory, the company continues its reset and further shakes up its subsidiaries. Activision will develop the next Halo, Playground Games and Turn 10 Studios have merged, and Obsidian will operate under Bethesda Game Studios. The aftermath of this latest layoff will see Microsoft cut at least 268 staff after it already laid off 1,600 employees in July.