Microsoft has confirmed it intends to shutter Ninja Theory, the Cambridge studio behind Hellblade, after two separate acquisition agreements for the developer fell through, as reported by Push Square on September 22, 2026. Xbox is now beginning employee consultation on a proposed closure while it continues to look at other paths forward, meaning the studio’s fate – and that of its newly announced third Hellblade entry, Senua – is not yet finalized.
Here’s the context: Ninja Theory has been a fixture of Xbox’s first-party lineup for years, built on a catalog that includes Heavenly Sword, Enslaved: Odyssey to the West, DmC: Devil May Cry, and a stint on Disney Infinity. For roughly the past decade, though, the studio has been almost entirely defined by the Hellblade series, and it was widely assumed the team would find a buyer the same way State of Decay 3 developer Undead Labs reportedly did, a scenario we covered when Ninja Theory’s potential closure first surfaced.
That assumption collapsed this week. Xbox executive Matt Booty confirmed that two separate agreements to sell the studio fell through, and the closure news lands alongside broader structural changes across the division, including 268 reported job cuts affecting Halo Studios and other parts of Microsoft, plus moves that shift the next Halo title to Activision and fold Obsidian into Bethesda. It’s part of a wider reshaping of Xbox’s first-party network that we broke down in our look at the ongoing studio spinoffs and layoffs.
Honestly, this is a rough turn for a team that seemed to have a clearer path out just months ago. Senua was announced earlier this year as the next chapter in the Hellblade series, and that project is now tied directly to a studio facing a proposed shutdown – a dynamic we explored in our piece on how the Senua reveal factored into the search for buyers. Unless something changes quickly, there’s a real chance the game never reaches players, and that would be a genuinely disappointing outcome for a studio with this much pedigree.
What makes it slightly less bleak, at least on paper, is that Microsoft says it’s still exploring other paths forward rather than treating the consultation as a formality. That’s not nothing, but it’s also not a rescue – it’s an open door that may or may not lead anywhere.
The confirmed details, per Booty’s update, are narrow but significant:
- Two failed agreements – Separate deals to sell or spin off Ninja Theory both fell through.
- Proposed closure – Microsoft has begun employee consultation on shutting the studio down.
- Other paths still open – Xbox says it will keep exploring alternatives during the process.
- Senua’s status – The third Hellblade entry, announced earlier in 2026, has no confirmed future outside the studio.
- Wider cuts – 268 job losses tied to Halo Studios and other parts of Xbox accompany this news.
What remains unclear is whether a third buyer, or some other arrangement, can still emerge before the consultation runs its course. Microsoft hasn’t named who it was negotiating with, hasn’t set a timetable for the consultation, and hasn’t said what happens to Senua‘s development specifically if the studio closes. Booty’s statement leaves room for a different outcome, but nothing in it guarantees one.
What to watch: the next real signal will be whether Xbox names a buyer, a spin-off structure, or any concrete alternative during the consultation period, and whether Microsoft issues a direct update on Senua‘s development status rather than leaving it implied. Until either happens, treat this as a proposed closure in progress, not a confirmed shutdown.
Should Microsoft keep hunting for a third buyer, or is a clean closure the more honest outcome at this point? And if Senua does get cancelled alongside the studio, how much of that lands on Xbox’s broader strategy versus just bad timing? Read more in our coverage of Senua’s uncertain path to release, and keep an eye out for further updates as the consultation continues.
