Xbox Closes Ninja Theory as 3% Margin Reset Hits Overextended Studios
Updated
Updated · The Verge · Jul 1
Xbox Closes Ninja Theory as 3% Margin Reset Hits Overextended Studios
1 articles · Updated · The Verge · Jul 1
Summary
Ninja Theory, the Xbox studio behind Hellblade, was told on Monday that it is being shut down, though staff still hope a buyer could emerge.
Xbox tied the move to a broader reset outlined June 10, when CEO Asha Sharma and content chief Matt Booty cited a 3% accountability margin, soaring memory and storage costs, and an overextended studio system.
Several other Xbox studios, including Compulsion Games and Double Fine, are also in active spinoff talks, according to Bloomberg, after earlier reports that Microsoft was weighing closures at at least five studios.
The cuts come amid wider retrenchment across Xbox, including expected July layoffs, possible game cancellations, and console price hikes of $100 to $150 as component shortages squeeze the business.
Amidst rising prices and studio closures, is Xbox being reset for a comeback or prepared for a sale?
Is Microsoft's AI success unintentionally dismantling its own Xbox gaming empire?
With 'RAMageddon' making consoles unaffordable, is the traditional gaming console model officially broken?
Xbox Reset 2026: 3,700 Layoffs, Studio Shutdowns, and the Uncertain Future of Game Pass
Overview
In July 2026, Microsoft launched the 'Xbox Reset,' a major restructuring that led to the potential closure or sale of Ninja Theory and several other studios. This move followed a public reset memo, leadership departures, and a wave of layoffs across Xbox’s gaming division. Ninja Theory, known for the Hellblade series, had just canceled 'Project Mara' and announced a new title, 'Senua,' in hopes of attracting investors. However, with multiple studios now negotiating their futures, the fate of these creative teams and their projects is uncertain, highlighting the immediate and far-reaching impact of Microsoft's strategic shift.