Ninja Theory Begins Layoffs After Failed Sale Attempts

Key points

• Xbox Chief Content Officer Matt Booty confirmed in September that two separate agreements to sell Ninja Theory failed, leading to a proposed closure.
• Employees, including gameplay programmer Katrin Mair and technical sound designer Alessio Mellina, have posted on LinkedIn about their roles being at risk of redundancy.
• The studio was developing 'Senua,' the third entry in the Hellblade series, which was announced at the 2026 Xbox Game Showcase but is now likely unfinished.
• Microsoft filed a trademark for 'Senua' in September, suggesting it intends to retain control of the franchise despite the studio's shutdown.
• This move is part of a broader Xbox restructuring that has already eliminated 1,600 jobs, with 1,600 more cuts expected before the fiscal year ends.

Background

Ninja Theory, acquired by Microsoft in 2018 for $117 million, is best known for the Hellblade series. The studio had previously released 'Senua's Saga: Hellblade 2' in 2024. In June 2026, reports indicated Microsoft was already planning to close or sell the studio when it revealed the new 'Senua' game, potentially using the reveal to attract buyers. Other studios like Double Fine and Undead Labs have successfully spun off from Xbox, but Ninja Theory's fate remains uncertain as it enters a formal consultation process.

How outlets are covering it

Aftermath and GamesIndustry.biz report that the layoffs began on October 5, 2026, following employee posts on LinkedIn. Game Developer notes that the studio's fate has been in flux since July, amidst a broader 'reset' of Xbox. Kotaku highlights the emotional impact on staff, quoting employees who expressed sadness over unfinished projects. All sources agree that the failure of two sale attempts is the primary driver for the closure process, though they differ slightly on the exact timeline of the consultation phase.

Why it matters

The potential closure of Ninja Theory signals a significant shift in Microsoft's strategy for its first-party studios, prioritizing cost-cutting over long-term IP development. The retention of the 'Senua' trademark by Microsoft raises questions about the future of the Hellblade franchise and whether the IP will be developed by another studio or shelved. This event also reflects the broader industry trend of large-scale layoffs and studio closures in the gaming sector.

What to watch

Microsoft will continue to explore other paths forward for Ninja Theory while engaging in a formal consultation process with employees. The outcome of this process will determine whether the studio is fully closed or if a new buyer emerges. Additionally, the fate of the 'Senua' IP and any unfinished projects will be a key point of interest for fans and the industry.