Xbox is set to close Ninja Theory, the Cambridge, England-based studio and developer of Hellblade, Heavenly Sword, Enslaved: Odyssey to the West, and DmC: Devil May Cry.
The studio, which began its life in March 2000, is reportedly set to close its doors, which is a bizarre thing to say given that Ninja Theory literally revealed a brand-new game last week at the Xbox Games Showcase. The studio is now trying to find a buyer.
Per Bloomberg, several Xbox studios at Microsoft, including Compulsion Games and Double Fine, are in “active negotiations”.
Ninja Theory was also mentioned before. The Verge confirmed the studio’s closure, with employees being told on Monday. The news of studio closures comes on the heels of Xbox CEO Asha Sharma and chief content officer Matt Booty sending out a company-wide email last week, indicating that a reset was in order for the brand to survive.
On the heels of that memo, Sharma revealed that the Xbox business currently has a 3 percent accountability margin, which is down year-on-year. “Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue,” Sharma revealed. The numbers are pretty dire coming off the Activision-Blizzard acquisition, which cost Microsoft nearly $70 billion, and several legal hurdles.
The reset memo says the company is overextended as it looks to change its strategy.
These are not the only three Xbox studios at risk of closure, but there's still a lot of uncertainty surrounding the company's plans. More to come in the next few days and weeks. Safe to say that the Xbox of July will look drastically different than the Xbox of June.
— Jason Schreier (@jasonschreier.bsky.social) 2026-06-15T20:34:19.841Z
In a post, Jason Schreier states that Compulsion Games, Double Fine, and Ninja Theory are not the only Xbox Game Studios at risk of closure, and that layoffs are unlikely to occur until the end of June (when the fiscal year ends).
Earlier this morning, the head of Xbox Games Studios, Craig Duncan, announced he was stepping down from his role. Alongside his departure was Louise O’Connor, the Xbox Game Studios Chief of Staff, who had been with Rare since 1999.
Under Sharma, Xbox has been returning to exclusives, including Gears of War: E-Day and Clockwork Revolution, two games which were confirmed last week at the Xbox Games Showcase. It was the same event at which Ninja Theory’s Senua was revealed, with a 2027 release date.
