Microsoft is beginning consultation with employees of Hellblade developer Ninja Theory as the studio faces potential closure after two separate agreements to sell the studio fell through, according to multiple reports.
Microsoft has initiated a consultation process with employees of Ninja Theory, the UK-based studio behind the Hellblade series, as the company moves toward a potential closure of the studio. The move comes after two attempts to sell Ninja Theory collapsed, leaving the studio without a buyer and forcing Microsoft to explore other options.
Microsoft’s Restructuring and Ninja Theory’s Fate
The decision to consult on Ninja Theory’s closure is part of a broader restructuring of Microsoft’s gaming division, which includes layoffs and the sale of several studios. In a memo, Xbox chief content officer Matt Booty stated, Unfortunately, two separate agreements for Ninja Theory fell through. We will now begin consultation with employees on a proposed closure while continuing to explore other paths forward.
The consultation process aligns with UK employment law, which requires employers to engage with staff before making significant changes. Microsoft has not yet confirmed whether the studio will close permanently, but the prospect has raised concerns among employees and fans of the Hellblade franchise. The studio, founded in 2000, is known for titles like Hellblade: Senua’s Sacrifice and Disney Infinity: 3.0.
Microsoft’s restructuring efforts, dubbed the “Xbox Reset,” have already seen the sale of Double Fine and Compulsion Games, with Undead Labs also transitioning to independent ownership. However, Ninja Theory’s fate remains uncertain. The company’s recent announcement of a new Hellblade game, Senua, in June 2026, was met with optimism, but the subsequent news of potential closure has cast a shadow over the project.
The Hellblade Franchise and Its Uncertain Future
Ninja Theory’s upcoming game, Senua, was unveiled at the Xbox Games Showcase in June 2026 as a larger, more expansive entry in the Hellblade series. The game was positioned as a major title for Microsoft, but the studio’s potential closure has left its future in doubt. A source at Microsoft, quoted by Game File, suggested that the announcement was partly intended to attract potential buyers for the studio.
The uncertainty surrounding Ninja Theory has also impacted other projects. Arkane, another studio under Microsoft’s umbrella, is also facing consultations over its future, with discussions expected to continue through the end of 2026. Microsoft’s focus on major franchises like Halo and Fallout has led to criticism that smaller studios are being sidelined in favor of more commercially viable properties.
Despite the challenges, some industry observers remain hopeful. Double Fine and Compulsion Games successfully navigated their transitions to independence, and Microsoft has indicated it is open to selling intellectual property to facilitate studio exits. However, the financial struggles of the Hellblade series have made it a less attractive target for potential buyers.
Reactions and Next Steps
Employees at Ninja Theory have been notified of the consultation process, though the studio remains operational. A spokesperson for Microsoft stated, Our focus should be on supporting those affected and treating one another with care and respect.
The company has also confirmed that a new team will lead the development of the next Halo title, separate from ongoing Call of Duty plans.
The outcome of the consultation will be discussed at an October 6 town hall, where Microsoft plans to reflect on its progress and outline its game lineup for the coming years. Fans of Ninja Theory have expressed frustration, with many questioning why the studio was put up for sale just weeks after announcing a new game. As the situation unfolds, the fate of Senua and the broader future of Microsoft’s gaming division remain uncertain.
For now, the only certainty is that Ninja Theory’s future is in limbo. The studio’s employees, fans, and industry watchers will be closely following developments as Microsoft navigates its restructuring and decides the next steps for one of its most storied studios.
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