Ninja Theory pulls the plug after 26 years as two buyer deals fall through.
British studio Ninja Theory, the creator of Heavenly Sword and the Hellblade series, has been dissolved following a second round of restructuring at Microsoft’s Xbox.
According to an announcement by Microsoft chief content officer Matt Booty, “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.”
Xbox’s latest restructuring saw 268 employees laid off, alongside numerous changes to studio and game management, with Activision now leading the next Halo title, Obsidian being placed under Bethesda’s leadership, and Playground Games and Turn 10 being merged.
This marks the second round of restructuring at the Microsoft-owned gaming company since it announced a major reset for “the next 100 days”. The first round took place three months ago, resulting in 3,200 employees being laid off and several studios departing Xbox.
At the time, Xbox announced that Ninja Theory would merge with Undead Labs while attempting to transition to new ownership, with funding intended to grow the Senua franchise and continue work on State of Decay 3. Unfortunately, the buyout did not go through, with Undead Labs becoming independent while Ninja Theory was ultimately shut down.
Ninja Theory ends over two decades of game development
Formed in 2000, Ninja Theory developed the popular action-adventure game Heavenly Sword for the PlayStation 3, launching to strong reception in 2007. The studio also developed Enslaved: Odyssey to the West in 2010 and DmC: Devil May Cry, its reboot of Capcom’s original franchise, in 2013.
Ninja Theory then created Hellblade: Senua’s Sacrifice in 2017, which became the studio’s biggest original hit. The fantasy action game won five BAFTA Games Awards, including Best British Game, Best Performance and Artistic Achievement.
Following its successful run as an independent studio, Microsoft acquired Ninja Theory in 2018. Ninja Theory later developed the sequel, Senua’s Saga: Hellblade II, which launched in 2024 and was generally well received. However, it did not quite match the success of its predecessor.
Towards the final years of its time under Xbox, the studio reportedly faced several difficulties. Ninja Theory cancelled its teased Project: Mara after six years of quiet development, while co-founder Tameem Antoniades left the studio in 2024.
Just four months ago, Xbox announced a standalone sequel to the Hellblade franchise, titled “Senua”, which is slated for release in 2027. According to Game File, the trailer showcase at the Xbox Games Showcase 2026 was reportedly an effort to attract potential buyers for Ninja Theory, as Xbox had already planned to sell the studio.
Unfortunately, those efforts did not pan out. It remains to be seen what will happen to the upcoming Senua game, and the wider franchise, with its creator now set to close its doors.
