Xbox Closes Studio After Announcing Major Franchise Sequel

In the past few hours, the global gaming community has been hit with a wave of disappointing news, particularly for Xbox enthusiasts. Microsoft’s Xbox division has announced its decision to shut down several flagship studios, including the British developer that had just celebrated a major reveal at the Xbox Games Showcase.

Just over a week ago, the press was abuzz with the announcement of Senua, the latest entry in the critically acclaimed Hellblade series from Ninja Theory. Only three days later, the studio’s creators were calmly discussing the expected length of the new adventure with fans.

Now, in a shocking turn, Microsoft has confirmed its intent to close Ninja Theory, while other well‑known studios such as Compulsion Games and Double Fine are forced to seek external buyers to avoid disappearing entirely. This appears to be part of a sweeping restructuring that will leave many professionals unemployed and permanently alter the internal studio ecosystem of the console.

It is inevitable to look back at the statements made by executive Matt Booty just four months ago, when he emphasized the critical importance of unwavering support for internal teams and projects. Windows Central, citing GamePro, reported his words: “In the early conversations that Asha and I had when we first met to address all of this, she— and we must acknowledge her merit—immediately highlighted how vital it is to support our studios and our games.”

Xbox’s ecosystem is engineered to deliver a diverse portfolio that spans everything from modest indie titles to blockbuster franchises and long‑running series. “At its core, we’re focused on developing everything from Kiln to Call of Duty, from Minecraft to South of Midnight,” explained Matt Booty, underscoring the breadth that defines the company’s foundation.

Booty, alongside Xbox CEO Asha Sharma, emphasized that the studio’s breadth is unparalleled in the entertainment landscape. “We have one of the most comprehensive portfolios in the industry, even when you consider the entire entertainment sector,” he said. “Our commitment is rooted in the belief that almost every major success began as a small idea. We must preserve the spaces where tiny sparks can ignite into something monumental. The creative environment that encourages bold, risk‑taking ideas must be woven into Xbox’s culture. Our studio system is built precisely for that purpose.”

Booty relishes the opportunity to shape projects from their earliest concepts. “The best part of my job is attending meetings when ideas are still in the first‑draft stage,” he remarked. “You can picture being in a room where someone says, ‘Let’s create a game about a wandering lighthouse’—that’s Keeper, by the way—and then immediately dive into reviewing Call of Duty plans for the next three years. It was invigorating to hear Asha reaffirm this commitment.”

Bloomberg journalist Jason Schreier weighed in on the industry’s seismic shift, predicting that “the Xbox brand in July will look drastically different from its current state in June.” He hinted that the coming months will reveal a new chapter for the console giant.

In a striking development, The Verge reports that Ninja Theory’s staff were informed of the studio’s sudden and unexpected shutdown via a brief phone call on Monday. Bloomberg adds that other high‑profile developers—such as Compulsion Games, the minds behind South of Midnight, and Double Fine, working on titles like Kiln and Keeper—are also in tense talks with Microsoft, seeking a way to extricate themselves from the parent company.

These studios face a stark choice: either secure their own financial independence or swiftly attract an investor with the capital to buy them out. Unfortunately, the likelihood of widespread layoffs is high, and the development of all affected projects is expected to stall for the foreseeable future.

This turmoil follows last week’s credible rumors that Xbox was preparing drastic budget cuts and a sweeping round of layoffs—an ominous foreshadowing that has now begun to unfold before our eyes.

Adding to the shock, Ninja Theory’s fate has struck a nerve among Xbox fans. The studio’s previous work, Hellblade 2, was a visual cornerstone for the Xbox Series consoles, and Phil Spencer himself showcased early graphics from the game to demonstrate the new console’s capabilities, cementing the franchise as a flagship title for the platform.

Today, the future of the series and its newly announced installment remains a complete mystery. While the press has reached out to Microsoft for an official statement, GamePro reports that the company has chosen to remain silent. We will keep a close eye on developments and bring you immediate updates on the brand’s trajectory.