Ninja Theory Told It's Closing Days After Revealing New Game

On June 8, Ninja Theory took the stage at Xbox Games Showcase and revealed Senua, a new game set for release next year on PlayStation 5, Steam, Xbox Series S/X, and Game Pass. The trailer played to a crowd primed for announcements. The studio had a future. Then, according to The Verge, staff at Ninja Theory were informed on Monday that the studio is being shut down.

That's a gap of roughly one week between showing your next project to the world and being told your studio no longer has a place inside Xbox. I've covered a lot of ugly corporate decisions in this industry, and this one is hard to top for sheer cruelty in its timing. Someone at Microsoft greenlit that Showcase appearance knowing what was coming.

Ninja Theory isn't alone. Bloomberg reported that Double Fine and Compulsion Games are also in active negotiations with Microsoft to avoid closure, with all three studios reportedly trying to buy their way to independence. The alternative is being shut down entirely. Bloomberg's Jason Schreier wrote on Bluesky: "Safe to say that the Xbox of July will look drastically different than the Xbox of June." Other unnamed studios are also said to be at risk, and Insider Gaming's Mike Straw claims that staff at Arkane, the Blade developer, are "scared."

A Week of Wreckage

The speed of this collapse is staggering. Xbox Game Studios boss Craig Duncan stepped down on Sunday, just hours before Bloomberg's reporting went live. Xbox CEO Asha Sharma's "reset" memo from earlier this month laid the groundwork, revealing that Xbox's accountability margin sits at 3% and that the division has spent over $20 billion on content, platform, and hardware investments over five years while annual revenue has actually declined by nearly half a billion dollars. The memo made it clear that cuts were coming. But the way those cuts are landing, studio by studio, days after a major public showcase, exposes a level of internal disorganization that no corporate memo can paper over.

These aren't studios that made bad games. Double Fine released Psychonauts 2 to critical acclaim, then followed it with Keeper and Kiln. Ninja Theory's Hellblade series pushed what games could do with portraying mental illness. Compulsion's South of Midnight won a Peabody Award. What they share is that none of them generated the kind of revenue Microsoft's spreadsheets apparently demand. As one analyst put it, they're "brilliant for prestige and rotten for the spreadsheet."

Microsoft has not commented publicly on any of the closures. Double Fine's Bluesky account posted a single emoji, the nervous sweat-smile, which says more than any press statement could. Even if some of these studios manage to negotiate independence, Bloomberg's reporting indicates that outcome would still involve significant layoffs.

What makes the Ninja Theory situation uniquely grim is the sequence. Microsoft didn't just close a studio; they let that studio stand in front of millions of viewers, announce a game with a release window, and build public excitement for a project that Microsoft already knew it might never ship. Senua was supposed to launch next year. Whether it ever does now depends on whether Ninja Theory can find a buyer before the end of Microsoft's fiscal year on June 30.