Xbox cuts leave Hellblade's Cambridge studio on the brink
Xbox has cut 268 more jobs and reshuffled its studios. Two deals to sell Ninja Theory, the Cambridge studio behind Hellblade, fell through, and staff now face a consultation on closure.
On Tuesday Xbox announced another 268 job cuts and a sweeping reshuffle of its studios. Tucked inside the memo was the line British gamers will care about most: the sale of Ninja Theory, the Cambridge studio behind Hellblade, has fallen through, twice. Xbox is now consulting staff on closing it.
Unfortunately, two separate agreements for Ninja Theory fell through. We will now begin consultation with employees on a proposed closure while continuing to explore other paths forward.
— Matt Booty, Xbox chief content officer
268 more jobs and a very big reshuffle
According to Matt Booty's memo, reported by VGC and GameSpot, the cuts fall "across Halo Studios, other first-party studios, and the XGS management and central functions layer." They come after 1,600 job losses in July. GamesRadar reports that Xbox plans up to 3,200 redundancies in total by the end of its 2027 financial year. Xbox chief executive Asha Sharma has called it "the most significant restructure in Xbox history."
The reshuffle is almost as dramatic as the cuts. The Halo series moves to Activision, which will build a separate team for it, away from Call of Duty. Obsidian moves under Bethesda. Undead Labs is now independent and has found a new publisher. Two British studios change hands inside Microsoft:
- Rare, the Sea of Thieves studio, moves under Activision.
- Playground Games in Leamington Spa merges with the US studio Turn 10 into one team "focused on the Forza and Fable franchises", according to VGC.
- Ninja Theory in Cambridge faces the consultation on closure.
From Hellblade to the exit door
Ninja Theory was founded in Cambridge in 2000 and bought by Microsoft in June 2018. Its big moment came with Hellblade: Senua's Sacrifice in 2017, a game exploring psychosis. The studio worked with neuroscientists, had backing from the Wellcome Trust and later set up a mental health research effort with University of Cambridge psychiatrist Paul Fletcher. The game won five awards at the 2018 BAFTA Games Awards.
It was also a commercial success on a modest budget. It sold more than 500,000 copies and made over $13 million in its first three months. Senua's Saga: Hellblade II followed in 2024, and a third game, called simply Senua, is slated for 2027. What happens to it now isn't clear.
The frustrating part is how close it came to surviving. In July, GameSpot reports, Sharma said Ninja Theory and Undead Labs had "entered terms to join new ownership with funding." Undead Labs made it. Ninja Theory didn't. Nobody has named the would-be buyers.
What "consultation" means in Britain
This is where UK law comes in. Under the rules on GOV.UK, an employer planning to make 20 or more people redundant at one site within 90 days must hold a collective consultation. That's a minimum of 30 days for 20 to 99 redundancies and 45 days for 100 or more. The employer also has to tell the government's Redundancy Payments Service in advance. Ninja Theory's current headcount hasn't been published. Wikipedia put it at 120 in 2020.
A consultation buys time, and Booty's memo leaves the door open to "other paths forward." Thin comfort, but not nothing.
There's an awkward backdrop too. In April the government launched a £30 million Games Growth Package, including a £28.5 million UK Games Fund offering grants of up to £250,000 to smaller studios. Creative Industries Minister Ian Murray said at the time that video games "are big business – and for too long their value to the British economy has been overlooked." Grants for start-ups are welcome. They don't help much when an American parent company decides a proven British studio no longer fits.
To be fair to Xbox
Xbox didn't simply switch Ninja Theory off. It tried to sell the studio, twice, and it has managed to find new homes for others. Pure Xbox reports that Compulsion Games and Double Fine went back to their management with their games, and Undead Labs will still release State of Decay 3 on Game Pass on day one. Selling a studio in a downturn is genuinely hard. And Microsoft is still investing in Britain: merging Playground with Turn 10 puts a Leamington Spa studio at the centre of two of Xbox's biggest series.
Mind the hype. Five BAFTAs buy you a lot of goodwill. They don't, it turns out, buy you a buyer.
Sources: VGC, GameSpot, GamesRadar+, The Next Web, Pure Xbox, GOV.UK: redundancy consultations, GOV.UK: Games Growth Package, Wikipedia: Ninja Theory