16th June 2026; 12:04 IST
The gaming industry is reeling from reports that Microsoft’s Xbox division is undergoing a major restructure, codenamed the "Xbox reset" under newly appointed CEO Asha Sharma. In the latest wave of potential studio cuts, sources suggest Microsoft is considering the closure of Ninja Theory, the BAFTA-award-winning developer behind Hellblade: Senua's Sacrifice and Senua's Saga: Hellblade II. However, instead of a permanent shutdown, the Cambridge-based studio is reportedly in active negotiations with Microsoft to buy back its independence and spin off.
Microsoft’s gaming strategy has shifted dramatically in 2026. Following declining hardware sales and escalating production costs, the company has prioritized streamlining its studio portfolio. Rather than facing outright closure like other internal teams, Ninja Theory is negotiating to spin off as a self-governing entity. Reports indicate that other prominent Xbox Game Studios, such as Double Fine (Psychonauts) and Compulsion Games (We Happy Few), are in similar discussions to regain their independent status.
While the prospect of independence offers creative freedom, it comes with a sobering reality. Studio insiders suggest that any spin-off agreement will likely require significant staff layoffs and cost-cutting measures to ensure financial viability post-acquisition.
In the midst of these corporate negotiations, Ninja Theory is consolidating its project pipeline. Studio head Dom Matthews confirmed that Project: Mara, the experimental psychological horror game first teased in 2020, has been officially cancelled.
According to Matthews, the decision was made to focus the studio's entire 85-person creative team on their newly announced major title, Senua, which was unveiled at the June 2026 Xbox Games Showcase. By concentrating all resources onto a single project, Ninja Theory hopes to deliver a highly polished, gameplay-first experience that can secure the studio's future, whether under Microsoft or as an independent studio.
Before its acquisition by Microsoft in 2018, Ninja Theory was the poster child for "independent AAA" (or Triple-I) development. They proved that a medium-sized team could deliver top-tier visual and narrative quality without the massive backing of a traditional publisher.
If the negotiations are successful, Ninja Theory's return to independence would allow them to control their own destiny, seek multi-platform releases, and explore alternative funding models. However, they will have to navigate a highly competitive, risk-averse industry landscape.
Is Ninja Theory closing down?
While reports of a potential closure emerged, Ninja Theory is actively negotiating with Microsoft to spin off and become an independent studio, similar to other Microsoft-owned studios seeking independence.
Why was Project: Mara cancelled?
Studio head Dom Matthews confirmed the cancellation of Project: Mara was a strategic decision to consolidate the studio's 85-person creative team to focus fully on their newly announced major title, Senua.
What is Ninja Theory's next game?
Following the cancellation of Project: Mara, Ninja Theory's sole focus is on Senua, which was officially announced at the June 2026 Xbox Games Showcase.
Official and reputable references used for this report:
IGN: Ninja Theory Studio Hub
GamesIndustry.biz: Industry Restructuring Reports
Xbox Game Studios Official Portal
Fable Delay Explained – What Microsoft's Decision Means for Xbox
Xbox Showcase 2026: 25th Anniversary Console, Gears of War: E-Day Date, and the Xbox Reset Strategy
Xbox Restructuring Rumors: Microsoft Doubles Down on Flagship Franchises Under New CEO
