The dark wave of restructurings in the gaming industry is hitting the British traditional studio Ninja Theory (Hellblade: Senua’s Sacrifice, Enslaved: Odyssey to the West) with full force. After two planned takeover or sale deals to save the developer failed at the last minute, the studio has now officially begun layoffs and initiated a statutory consultation process that is expected to result in the complete closure of the studio.

Failed last-ditch effort amid Microsoft’s cost-cutting measures

The background of the decline is massive cost-saving measures at Microsoft and its Xbox division, as part of which around 3,200 jobs are being cut and several internal development studios are to be spun off or closed. While other Xbox studios like Undead Labs managed to become independent or were taken over by new partners, the negotiations to acquire Ninja Theory reportedly collapsed unexpectedly.

To make the studio attractive to potential buyers, Xbox even revealed the new title Senua in summer 2026 – a spin-off in the Hellblade universe with an increased focus on dynamic action combat. However, after both takeover deals fell through, the project now faces final cancellation.

Affected developers say farewell on LinkedIn

Since October 5th, numerous employees from various departments – from gameplay programmers to technical sound designers to performance capture specialists – have shared their resignations and severance notifications on platforms like LinkedIn and BlueSky.

The emotional message from the staff is consistent:

  • Lost potential: Many developers deeply regret that the dedicated team can no longer complete the current project Senua .

  • Pride in achievements: Despite the bitter end, former employees highlight the unique studio culture, the camaraderie, and the pioneering work in motion capture and audio design.

The uncertain end of an era

Although the final closure has not yet been formally completed due to the ongoing consultation process, the extensive layoffs speak a clear language. Unless an unexpected investor steps in at the very last moment, the gaming industry will lose one of its most defining AA studios for atmospheric storytelling and visual innovation with Ninja Theory.