Microsoft's Xbox division is executing another round of studio-level surgery under new CEO Asha Sharma, with Ninja Theory slated for outright closure while Double Fine and Compulsion Games pursue last-minute independence deals. Staff at Ninja Theory learned of the shutdown during a Monday call, though the Cambridge-based team behind the Hellblade series is still scrambling for a potential buyer to keep operations alive. The moves follow Sharma and chief content officer Matt Booty's public warning of a broad "reset" driven by over-extension in the studio portfolio and rising hardware costs.

Compulsion Games in Montreal, developer of South of Midnight, and Tim Schafer's Double Fine in San Francisco are reportedly negotiating spin-offs rather than face the same fate, though Bloomberg reporting indicates job impacts remain likely even in a successful buyout. A new Hellblade title was showcased at the recent Xbox event, adding a layer of awkward timing to the Ninja Theory news. Multiple outlets confirm "several" additional Xbox studios are in similar conversations, suggesting this is not an isolated trim.

The pattern of acquisition followed by contraction continues without clear public metrics on performance thresholds or timelines. Xbox has not issued an official comment on the specific studio situations.