Xbox reportedly shuts down Ninja Theory as Microsoft explores major gaming restructuring

3 min readJun 16, 2026 10:38 AM IST

Microsoft's gaming division is reportedly undergoing a significant restructuring as executives reassess the company's long-term Xbox strategy. (Image: Ninja theory)

Microsoft’s Xbox division is reportedly undergoing one of its biggest restructurings in years, with multiple studios facing an uncertain future as the company re-evaluates its gaming strategy.

According to reports, Xbox is shutting down Ninja Theory, the UK-based studio best known for the Hellblade franchise. Employees were reportedly informed of the decision during an internal call, although staff are said to be hopeful that a buyer could emerge and keep the studio operating.

The reported closure comes as Microsoft examines broader changes across its gaming business. Several Xbox-owned studios, including Compulsion Games and Double Fine, are reportedly engaged in discussions about spinning off into independent companies rather than remaining under Microsoft’s ownership.

The changes come after last week’s statements from Xbox’s CEO Asha Sharma and head of Xbox content Matt Booty, who talked about the “need for reset” in the gaming division. Sources say that executives believe that Xbox went beyond in its studio expansion efforts and that it is currently experiencing increased financial stress, due to higher costs of hardware and the toughening of conditions in the gaming industry.

One of the most well-known first-party studios belonging to Microsoft was Ninja Theory, acquired back in 2018 by the tech giant. The studio made an impact on the gaming world through its Hellblade: Senua’s Sacrifice game and its sequel, which became one of the best narrative series of Xbox games. Only days ago, Microsoft presented another installment of Senua during its Xbox Games Showcase event.

If Ninja Theory closes without a buyer, Microsoft would need to decide whether to continue developing the series through another studio or shelve the franchise altogether.

The reported shake-up extends beyond Ninja Theory. In prior news stories, it was mentioned that Compulsion Games, famous for its game titles like South of Midnight and We Happy Few, may also soon be joining the list of shut down studios. However, according to recent news reports, the studio heads have been discussing an alternate plan with Microsoft.

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The restructuring process is considered to be one of the first steps taken by Sharma since taking charge at Xbox. Despite having not been confirmed by Microsoft, the restructuring is a clear indication of change coming to Xbox.