For fans of the cinematic action-adventure game series Hellblade, one of the most exciting announcements from Microsoft's recent Xbox Games Showcase was the reveal of Senua, a third entry in the franchise set to bring "broader gameplay, more combat depth, and an interconnected world" that's scheduled for a 2027 release.

Just over a week after the show, however, it's now come to light that Hellblade developer Ninja Theory, alongside several other Xbox studios, is "at risk of being shuttered" by the brand's publishing division. Reportedly, Ninja Theory, Double Fine (Keeper, Kiln), Compulsion Games (South of Midnight), and others are in "active negotiations" for the fate of their teams.

That revelation came as a complete surprise to Xbox fans, with the news of Ninja Theory's situation the most shocking of all. Why would Microsoft and Xbox announce a new game from the studio that's set to come out next year if it planned to close it in the coming weeks?

Thanks to a new report from Game File that we've confirmed to be accurate with Windows Central's own sources, we have an answer: Microsoft hoped that the trailer for Senua would help "draw investor interest" to the developer.

"By the time that game was revealed, Microsoft had already planned to sunset or split with the studio," writes Game File's Stephen Totilo. "The thinking was that the promise of a newly announced game would help draw investor interest in the studio."

Separately, according to a source in contact with The Verge, the end of Ninja Theory's time as an Xbox studio is all but confirmed, and its employees are "hoping the studio will find a buyer." It's unknown if the developers were aware of Microsoft's plans at the time of Senua's announcement. The fate of Senua itself is also unclear right now.

News of these planned shutdowns and/or separations from Xbox came mere hours after it was reported that Xbox Game Studios head Craig Duncan and chief of staff Louise O'Connor quietly stepped down from their positions.

It also arrived soon after it was recently reported that Xbox would be racked by heavy layoffs in July, with the cuts coming as part of a major reorganization of the brand initiated by its new CEO Asha Sharma. Heading into that "Xbox reset," Sharma and chief content officer Matt Booty have said Xbox has "over-extended" and needs to focus on its largest core franchises.

In line with that goal, Microsoft and Xbox reportedly want to "move faster" with new Halo, Fallout, and The Elder Scrolls games, with a full restructuring of Xbox also "on the table." Options for that are said to include making Xbox a subsidiary of Microsoft, a joint-venture operation with other business partners, or a wholly independent business separate from the larger firm entirely.

Ultimately, it's unclear where Xbox will go from here. My heart goes out to all the developers at Ninja Theory and workers at other affected Xbox studios, however, and I sincerely hope that they find a viable path forward. Whether as independent teams or as developers supported by other publishers, the creative studios leaving Xbox and the devs making their games deserve to go on.

How do you feel about the reported Microsoft and Xbox studio closures? Do you agree with the decision to focus on Xbox's biggest IPs? Let me know in the comments, and in our poll.

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Brendan Lowry is a Windows Central writer and Oakland University graduate with a burning passion for video games, of which he's been an avid fan since childhood. He's been writing for Team WC since the summer of 2017, and you'll find him doing news, editorials, reviews, and general coverage on everything gaming, Xbox, and Windows PC. His favorite game of all time is probably NieR: Automata, though Elden Ring, Fallout: New Vegas, and Team Fortress 2 are in the running, too. When he's not writing or gaming, there's a good chance he's either watching an interesting new movie or TV show or actually going outside for once. Follow him on X (Twitter).