Microsoft is reportedly considering the closure of Arkane Studios along with four other studios as part of a broad reset of its Xbox division. The changes could also result in the cancellation of the Marvel's Blade game.
Arkane Studios, developer of the Dishonored series, is one of five Microsoft-owned studios facing potential closure. The others in similar discussions are Compulsion Games, Ninja Theory, Double Fine, and Undead Labs. Sources indicate that Marvel's Blade may be cancelled as a result.
Layoffs across the division are set to begin on July 6 after the close of Microsoft's fiscal quarter. Funding has already been pulled from Project Fantasy at IO Interactive. Some studios could merge with others, be sold, or spun off instead of being shuttered.
The reportedly wide-ranging cuts form part of new CEO Ash Sharma's reset plan for the Xbox division. The scale may exceed prior layoffs, with at least 1,000 jobs expected to be lost. Marvel's Blade had been internally delayed from a late 2026 release to late 2027 and was over budget.
