Xbox closes Ninja Theory as studio spin-off talks continue

Xbox is closing down ninja theory, the studio behind the Hellblade series. Staffers were told on a call on Monday, after Xbox leadership warned last week of a reset and said the company had over extended with its studio system.

The closure comes as several Xbox studios at Microsoft are in active negotiations about spinning off, including Compulsion Games and Double Fine. described those talks as active negotiations, while Microsoft revealed a new Hellblade game, Senua, at the Xbox Games Showcase just over a week ago.

Matt Booty and Asha Sharma

Last week, Xbox CEO Asha Sharma and chief content officer Matt Booty said the company had over extended with its studio system and pointed to a reset at Xbox. That warning now sits alongside a studio closure and separate spin-off talks inside the same division.

Kotaku reported earlier on Monday that Microsoft was planning to shut down Compulsion, then updated that studio leadership was in negotiations with Microsoft. By later that day, staff at Ninja Theory had been told their own studio was closing, adding a second concrete cut to the same corporate restructuring.

Compulsion Games and Double Fine

Compulsion Games and Double Fine are both in active negotiations about spinning off, according to the reporting on Xbox’s studio changes. For employees, that means the restructuring is not limited to one team: one studio is being closed, while others are being pushed into separate deal talks.

Ninja Theory had only just been tied to Microsoft’s public plans for Hellblade. The studio is hoping it will find a buyer, which gives staff a possible path forward even as the closure decision lands.

Xbox did not immediately reply to a request for comment, leaving the Monday call as the clearest step so far. The immediate question for workers inside the division is which of these talks ends in a sale, which ends in a spin-off, and which ends in a shutdown.