Microsoft has announced 268 job cuts across its first-party gaming studios and management layers as of September 22, 2026. As part of this reduction, Hellblade developer Ninja Theory has entered a consultation period for a proposed closure, a move that follows the collapse of two separate buyout agreements intended to divest the studio.
The proposed shutdown marks a stark turn for the Cambridge-based developer. In June 2026, Xbox revealed a new project titled Senua, a move now identified as a tactical effort to attract potential investors during a broader divestiture process. While other Microsoft-owned studios including Undead Labs, Double Fine, and Compulsion Games successfully transitioned to independent status or new ownership during this period, Ninja Theory failed to secure a deal, leaving its future in jeopardy.
In an official Xbox update, the company framed these cuts as part of a “reset” first outlined by Xbox CEO Asha Sharma in July. The 268 roles eliminated in this wave contribute to a massive 3,200-job reduction plan that is now approximately three-quarters complete.
The restructuring has fundamentally altered the management of several high-profile franchises. The next entry in the Halo series is no longer being developed by Halo Studios (formerly 343 Industries), but has instead been transferred to Activision. Additionally, Obsidian Entertainment has been moved under the management of Bethesda to focus on Fallout projects, while the brands for Rare and World’s Edge have also been folded into the Activision organizational structure.
The fate of Ninja Theory’s current projects remains uncertain during the consultation period. While the Senua reveal was used as leverage to find a buyer, the failure of those negotiations leaves a gap in the studio’s roadmap. This period of instability extends to other parts of the Xbox portfolio as well; Arkane Lyon remains in a separate consultation phase regarding its own future, with a resolution not expected until the end of 2026.
These moves signal a significant consolidation of Xbox’s internal resources. By shifting major intellectual properties like Halo to Activision and merging veteran studios like Obsidian into Bethesda, Microsoft appears to be prioritizing established management pipelines over maintaining the expansive, multi-studio structure it built through acquisitions over the last decade.
