However, despite these potential plans, the report notes that it is still unclear whether any member of Ninja Theory’s leadership was aware of this plan.

Other reports have indicated that Ninja Theory, along with Double Fine and Compulsion Games, have begun negotiations with Microsoft with the hopes of spinning the companies off rather than simply being closed down. Even if these negotiations are successful, however, the studios will still likely end up being affected by major layoffs.

More recently, Insider Gaming’s Mike Straw had noted through social media posts that Xbox is planning to shut down “at least two” of its studios by the end of the year. “One of which would come as a shock to everyone,” he said.

“It wasn’t Obsidian or Rare, for those who’ve asked. I’m working on trying to get more details on what employees are feeling at the moment. But the picture could become clearer in the coming weeks, depending on what decisions get finalized.”

Rumors have indicated that Xbox is planning layoffs and studio closures following the end of Microsoft’s fiscal year on June 30th. These decisions are seemingly being made as part of Xbox CEO Asha Sharma’s plans to reduce the losses of revenues that have been incurred by the division in recent times. In a post discussing the “realities” faced by Xbox, Sharma and CCO Matt Booty had written about the company seeing its accountability margins go down by 3 percent year-on-year.

“We will end this fiscal year at about a 3 percent accountability margin, down year-over-year,” they wrote. “Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue.”

In the meantime, Xbox Game Studios head Craig Duncan and chief of staff Louise O’Connor have reportedly stepped down from their roles. In an email to staff, Duncan wrote about having led Xbox Game studios for 20 months, and being proud of the “many flawless launches that drove business success for the company” that took place under his tenure.

Despite all the doom and gloom surrounding potential studio closures and layoffs, Xbox’s chief strategy officer Matthew Ball has reaffirmed that the company is not “reversing course” on its plans to release more Xbox-exclusive games.

“These rumors are false. Gears of War: E-Day and Clockwork Revolution will stay exclusive,” he wrote on social media. “There are no conversations and have been no conversations to ‘reverse course.’”

For more on why Xbox might be looking to trim some of its workforce, check out the report about how successful Xbox releases had to subsidize underwhelming projects, including some that were cancelled.

According to Bloomberg’s Jason Schreier, Keeper and Kiln developer Double Fine, and South of Midnight developer Compulsion Games have already started negotiations with Microsoft to spin the companies off in an attempt to avoid being closed down. As Schreier notes, however, the studios will still likely see some layoffs even if the negotiations are successful and the studios are able to become independent.

Reports of Compulsion Games being targeted for closure came about thanks to a report by Kotaku. However, the precise number of employees to be affected at the studio remains unknown.

The major layoffs and potential studio closures are expected to hit Xbox shortly after Microsoft wraps up its current fiscal year on June 30th, and are noted as being part of division CEO Asha Sharma’s plans to curtail failing revenue. Along with letting many of its employees go, Xbox is also expected to undergo budget cuts across its marketing teams and “some other areas of business.”

“We will end this fiscal year at about a 3 percent accountability margin, down year-over-year,” explained Sharma and CCO Matt Booty recently. “Excluding Activision Blizzard King, over the past five years, we have spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time. Going forward, this cannot continue.”

Xbox has also been facing major issues with its hardware division, with rising hardware component costs leading to margins getting slimmer. Sharma noted that, by the time she took over as CEO in February, the company was already paying twice as much as it did in October 2025 for the same console storage components. Looking to the future, Sharma doesn’t believe things are going to get better.

“As we plan for the 2027 holiday season, we expect another significant increase, taking us over 5x the prices we paid only two years earlier,” she wrote. “Memory costs have followed a broadly similar trajectory. While the entire industry is facing a components crisis, we believe we have been impacted more greatly than many of our peers due to the choices we made over the last half decade. We are currently unable to make as many consoles as players want to buy, and we need a new business model and partnerships for hardware as we remain committed to Helix.”

In the meantime, a new report has indicated that many development teams owned by publishers are going to face some trouble in the coming days, with French journalist Sylvain Trinel calling Microsoft’s layoffs “just the beginning of a massive bloodbath” and “a catastrophe” for studios like BioWare, Quantic Dream, and DON’T NOD.

But that’s not the only area it’s going to improve, as the developer confirmed on Twitter that it would be “quite a bit longer” than its predecessors. “We’re creating a more expansive, fully-realized action-adventure journey while still keeping the experience focused, carefully crafted, and deliberately paced around Senua’s story.”

As for the plot, our hero is apparently trapped between the realms of the living and dead, seeking to reach the afterlife. The problem is all the enemies in her path, especially those pulling from her memories. If you know anything about Senua’s trials and tribulations, especially with psychosis, then it’s going to be a very tough journey indeed.

Compared to the Hellblade series, Senua offers a more interconnected world with more exploration and puzzle-solving. Combat has also been upgraded with the ability to dual-wield and a handful of abilities to unleash. Of course, you can also expect bosses, including what appears to be a long-awaited confrontation against the shadow of her past.

Senua launches in 2027 for Xbox Series X/S, PS5, and PC, so stay tuned for further updates and more gameplay in the coming months.

The trailer for Senua, coming in at 2 minutes in length, gives us a thorough look at the upcoming title’s gameplay, which will involve much more of what players have already been familiar with if they’ve played the previous entries in the series. This means plenty of platforming to get to new locations, and visceral melee combat where just about every attack could mean the difference between life and death for Senua.

While it might look quite similar to the previous Hellblade games, studio head Dom Matthews has confirmed that Senua doesn’t have “Hellblade” as part of its title because it is “an out-and-out action-adventure game”. This means that players will have “more agency and a lot more gameplay” in the upcoming game.

The core story of Senua seems to revolve around the eponymous protagonist trying to fight her way through hordes of enemies in order to reach the afterlife and reunite with the loved ones that she has lost over the years. Ninja Theory has also noted that all of the gameplay showcased in the trailer is from an early pre-release build of the game, and that will likely be much more polished by the time its release date rolls around.

Senua is being developed for PC, PS5, and Xbox Series X/S, and is slated for release some time in 2027.

According to Corden’s report, State of Decay 3 has progressed far along in development that it is undergoing private alpha testing with parts of the franchise’s community. Along with this, he has also indicated that the title will be well polished, especially when compared to State of Decay 2.

“It’s almost certain we’ll see State of Decay 3 at the showcase too, given that it’s already in private alpha testing with a small subset of the community alongside some YouTubers,” wrote Corden. “And from what I’ve heard … it sounds like Undead Labs really, really nailed the ‘AAA’ feel that was absent from State of Decay 2.”

If you’ve been wondering why State of Decay 3 has been taking so long to develop, studio head Philip Holt revealed back in April that, back when the announcement trailer was released, the game only really existed as a Word document.

“So that trailer – there really wasn’t a game or game team when we were working on that trailer, like, it was so early,” he said in an interview. “You know, the game was in a Word document. It was really the very beginnings of software.”

The trailer itself was pre-rendered, created completely by Blur, and was meant to be a way for Undead Labs to show its vision for what it wanted State of Decay 3 to be.

As for other development teams part of XBOX Game Studios, Corden doesn’t believe that we will see much in the way of announcements from studios like Rare, Obsidian, Compulsion, Ninja Theory, or Double Fine. He did, however, note that Ninja Theory and Double Fine have been working on projects described as “more ambitious” than their recent outings – Senua’s Saga: Hellblade 2 and Kiln, respectively. However, these projects are still quite early in development, and it is unlikely that either studio will be unveiling it just yet.

Similarly, Blizzard is also expected to sit the June 7th showcase out, since it tends to unveil its major projects during its own yearly event – BlizzCon. Among these is expected to be a shooter based on the StarCraft universe, which rumors have indicated will be closer in visual style to StarCraft 2’s cinematics than Overwatch’s more stylized look.

As for other projects that might be unveiled at the showcase, Corden believes that we might finally get to see what Toys for Bob has been working on – a project that is rumored to be a brand-new entry in the Spyro franchise. InXile is also expected to show off more of its in-development game, Clockwork Revolution.

On the hardware side of things, while Project Helix is unlikely to make an appearance at the June 7th Xbox Showcase, recent leaks have indicated that Microsoft might be getting closer to finally unveiling its rumored third iteration of the Xbox Elite Controller.

“During the financial year, Ninja Theory had a focus on the development and release of Senua’s Saga Hellblade 2: Enhanced Edition, an improved and upgraded version of Hellblade 2, which was released on all existing platforms, including PlayStation 5,” Ninja Theory explained in its report. “This was successfully released on 12th August 2025 and saw an increase in the Metacritic score for the game.”

Along with this, Ninja Theory has also confirmed that its revenue saw a 9 percent year-over-year decrease, coming in at £22.3 million, compared to 2024’s £24.5 million. This, noted the studio, is “a direct result of the intercompany arrangements and is in line with business activity.” With its operating expenses—managed by a team at Microsoft that sets annual budget allocations—having decreased by 13.36 percent year-over year down to £18.709 million, it also boasted a “strong balance sheet”, with its assets being in the positive. Overall, Ninja Theory has reported a profit of around £5 million for the year ending on June 30th, 2025.

Senua’s Saga: Hellblade 2 was originally released on PC and Xbox Series X/S all the way back in 2024. The title eventually got a PS5 release in August 2025, alongside a free upgrade to the Enhanced Edition version, which brought in many enhancements, like a 60 FPS mode for consoles, and a “very high” graphics preset for PC players. Along with this, the upgrade also brought in the Dark Rot mode from the first game, which makes the Rot further spread across Senua’s body whenever she falls.

Senua’s Saga: Hellblade 2 continues the story of Senua, where Hellblade: Senua’s Sacrifice left off. Senua’s village is raided by the Northmen, with the protagonist herself being taken to Viking Iceland as a slave. However, this was part of Senua’s plan to stop the raiders at their very source. The title was much larger in scale than its predecessor, and told an epic story that included allies and even expanded on her dealings with the Furies and the demons of her past.

Back in 2024, the studio had revealed that, even though Senua’s Saga: Hellblade 2 had been unveiled in 2019, the only part of the game that was ready at the time was its reveal trailer. Rather, proper work on the project only started in 2020, after Ninja Theory was done with its multiplayer project, Bleeding Edge.

For more details about Senua’s Saga: Hellblade 2 Enhanced Edition, take a look at our review, where we gave it a score of 8 out of 10 thanks to its visuals, voice acting, story, and handling of complex and sensitive themes.

But what are they up to, and are their offerings going to be enough to either go toe to toe with the PS5, or, at the very least, gather enough momentum to attempt reversing the two consoles’ fading fortunes? We’re here to help answer those questions.

Join us as we take a look at what Xbox Game Studios is cooking up for a year that’s shaping up to be just as good as the one before it on the gaming front. It’s also a big year as the Xbox turns 25, and as such, there’s going to be a lot to be excited about if you’ve been a fan over the years. Let’s get started.

The Coalition

The studio behind the Gears of War franchise is all set to take the meta-narrative it has established over the years back to its roots, bringing back Marcus and Dom to the stage for a prequel that has fans excited to learn more about the gruff soldier’s turbulent relationship with his superiors and the events that led to the Locusts rising as a threat to his world in Gears of War: E-Day.

In a look back at the year it had at 2025, which featured studio heads discussing future projects, Mike Crump (who heads The Coalition) was pretty excited to assert that E-Day is the franchise’s “most ambitious title yet”, and confirmed that it was on track to release later this year with Polish studio People Can Fly joining the studio to lend a helping hand.

We’re going to be watching out with very sharp eyes for a release date announcement, and we’re sure that those among you who love Gears of War share our enthusiasm.

Compulsion Games

The South of Midnight developer has been basking in the success of the title, expressing gratitude for its excellent reception and confirming that a new project is already in the works. It has been stated that the lessons it picked up from developing South of Midnight have allowed it to grow and mature as a studio, and that this new project is going to reflect those learnings to be a game that is made to impress.

However, the studio is likely to focus on the multiplatform release for South of Midnight over this year, and its new project is likely not going to surface in 2026.

Double Fine

The studio has been relatively silent since the release of Keeper last year, and with little to no news about its next project surfacing in the months that followed, we can only guess that the team behind a very unique game is getting some well-deserved rest while they put down ideas for their next big thing on the drawing board.

That’s not to say we may not hear from the studio over the course of the year, though, and we’re hoping for more unique ideas, given its last project was a game with no dialogue that still managed to keep us glued to our screens.

Halo Studios

It looks like Halo is taking the Gears of War route this year, with Halo Studios all set to release Halo: Campaign Evolved sometime this year for the PS5, PC, and Xbox. A remake of a timeless classic, the new game is slated to bring several improvements to the original’s gameplay loop, such as the ability to hijack vehicles, weapon zooming, a redesign for the Warthog, up to 4-player online coop and 2-player couch coop, and so much more.

The visuals are also getting a leg up with Unreal Engine 5 powering the experience. The game’s iconic multiplayer being given a pass is a bummer, though. However, getting to see the campaign in a whole new light is something we’re definitely excited about. The bonus missions that act as a prequel are another nice touch that we’re curious about.

InXile Entertainment

We’ve been looking forward to Clockwork Revolution ever since this title was announced by inXile back in 2023. With a solid look into how the game works last year, and rumors that it could be slated for release this year, which must be taken with a pinch of salt, this is definitely one to watch out for.

If you’re unfamiliar with the game, it brings a very interesting premise with some time-travel shenanigans that pits you against a manipulative antagonist and her quest to consolidate power with a customizable protagonist. It’s quite impressive, and we hope the rumors that it’s making its way to our screens later this year are true, although we’re only carefully optimistic on that front.

Mojang Studios

There’s a lot to be excited about if you’re into Minecraft, as Mojang is bringing eight new baby farm mobs to the game, replete with visual changes that make them quite adorable indeed. However, the drop is still in its testing phase, and you might have to wait a while for an official release announcement, depending on how things progress.

However, that’s still good news, and we’ll be sure to have an update for you as soon as we can confirm any changes to the status quo.

Ninja Theory

The studio behind Hellblade is reportedly working on a new title that’s focused on being more interactive and action-oriented than its past offerings while sustaining the cinematic quality that it is now known for, as per Windows Central’s Jez Corden.

While there is speculation that the new title could be Hellblade 3, it could very well be a new IP. Either way, it’s likely that 2026 might be a quiet year for Ninja Theory, but that could very well change in the coming months.

Obsidian Entertainment

There are reportedly four new projects in development, along with speculations that a remake of Fallout: New Vegas in the vein of last year’s Oblivion is likely coming this year. However, that remains currently unconfirmed, so hopefully this month’s Xbox Direct may bring news on that front.

But if you happen to miss it, fret not, since we’re definitely going to have your back on that one!

Playground Games

The long-standing staple of Xbox Game Studios is going to be front and center at the Developer_Direct event, with both Fable and Forza Horizon 6 slated to make an appearance in what is shaping up to be a big year for the studio.

With no gameplay currently available for both titles, we’re quite certain that we’ll be getting quite a close look at what each of them is bringing to the table. While Fable is poised to be a reboot of the franchise, aimed at modernizing it for a new generation of players, Forza Horizon 6 is going to take you to Japan this time around, with a map that’s touted to be the biggest one yet in the franchise and a lot to look forward to in it.

We expect a release date announcement later this month, although that could take a little longer. Both games are currently slated for a 2026 release, though.

Rare

While the cancellation of Everwild is sure to have been a blow to the Sea of Thieves developer, the appointment of Lousie O’ Connor as the Chief of Staff for Xbox Game Studios might help with dealing with that loss and the layoffs that affected the studio.

It’s looking like a quiet year that’s going to be spent figuring out a way forward for the studio; however, we’re hopeful that we at least get a hint at what it aims to do next.

Turn 10 Studios

The studio behind Forza Motorsport is going to stop updates to its flagship title in order to help Playground Games with Forza Horizon 6. While that news is bittersweet, we’re still happy that the studio has managed to survive the turbulence of last year and come out on top.

Who knows, we might even get news of a new project a little later down the line. But for now, it’s looking like a relatively quiet year for this one.

Undead Labs

We’re still waiting on news about State of Decay 3 after Undead Labs posted that very cryptic teaser ahead of the 2025 edition of Summer Games Fest. However, things have been very quiet on that front, and the studio’s layoffs from last year have us a tad worried about the title’s current status.

We’re still holding out hope, however, and would be delighted to hear some good news at Developer_Direct later this month. Fingers crossed, we’d say.

World’s Edge

The studio’s job postings from last year fuelled a lot of speculation that it was taking a more hands-on approach to Age of Empires, and that an Unreal Engine-powered new addition to the franchise was in the works. And while nothing is confirmed at this moment, that could very well change later this year.

It would make sense for the studio to bring out a new title in its flagship franchise, and you can bet that we’d be very happy to hear about it over the course of this year. Once again, we’re going to advise cautious optimism, but one can always hope, right?

And that’s a wrap on all of the big releases and potential announcements from Xbox Game Studios as it gears up for a year that’s quite the landmark for the iconic console. We can’t wait to get our hands on all of the titles that are coming our way, and hope to join you as we enjoy a year of great games from these talented studios.

During the Xbox Two Podcast with Rand al Thor 19, Corden alleges that the title, announced in 2020, was “just a concept; it’s not a game they are currently working on. It might be something they work on eventually, but Project: Mara is not a game that is currently being worked on at Ninja Theory.”

What is on the cards? Hellblade 3, apparently, and it’s reportedly going to be “a bit more interactive than Hellblade 1 and 2. They want to make it more of a game, and broaden its appeal,” said Corden. This may very well be the studio’s next project that was allegedly greenlit in May 2024 following the release of Senua’s Saga: Hellblade 2.

Project: Mara was described as an “experimental” horror title that “explores new ways of storytelling.” Featuring Melina Juergens, who plays Senua in the Hellblade series, it would have offered a “real-world and grounded representation of mental terror.”

While there’s no official confirmation on Project: Mara’s status, Ninja Theory hasn’t exactly inundated the world with details since its reveal. The last major update was in January 2021, when a developer diary confirmed that the story would unfold in a single apartment.

The speculation around that secret fourth game thus continues, but fortunately, we won’t have to wait too long to find out. The Xbox Developer_Direct ’26 airs on January 22nd at 10 AM PST, and features the likes of Fable, Forza Horizon 6 and Beast of Reincarnation.

Retailing for $29.99, it’s also a free upgrade for those who own the PS4 version. Best of all, it includes all the enhancements from the Xbox Series X/S version, including modes with ray tracing and 120 frames per second. It also supports the PS5 Pro and the DualSense’s Haptic Feedback.

Check out our review of the original here for more details. You can also read our thoughts on the PS5 version of Senua’s Saga: Hellblade 2. Alongside support for the console (and PS5 Pro), its release coincides with the Enhanced update, which adds a 60 FPS mode, the Dark Rot Challenge, new Photo Mode features and over four hours of commentary from the cast and development team.

Senua returns as the protagonist, venturing into Iceland to save her people from the Northmen. Combat is similar to the first game, featuring hack-and-slash gameplay and intermittent puzzles as Senua must contend with the Furies, voices manifesting from her psychosis.

Alongside the PS5 release, a brand new Enhanced update is available for all platforms. It adds a Performance Mode for consoles, finally enabling 60 FPS gameplay, and the new Dark Rot Challenge, where death causes the Rot to spread through Senua. The game ultimately ends with all progress wiped out if it reaches her head.

Fans can also look forward to more than four hours of behind-the-scenes commentary, new Photo Mode settings, and much more. Check out our review, where we gave it an eight out of ten.