Arkane Lyon, the studio behind acclaimed titles like Dishonored and Deathloop, is reportedly facing closure by November if a new buyer is not found. The studio, acquired by Microsoft as part of its ZeniMax Media purchase in 2021, has been caught in the company's ongoing restructuring and significant layoffs.
A report from French publication Le Monde, corroborated by the Video Game Workers’ Union (STJV), indicates that Microsoft informed Arkane Lyon of potential closure on July 16. French law mandates a three-month period for companies with over 1,000 employees to seek a buyer for an operational arm slated for closure. This search period, which began this summer, is set to conclude on November 13.
If no buyer emerges, the closure could result in the loss of jobs for 217 employees. While redundancy negotiations are reportedly underway, including efforts to redeploy staff to other Microsoft studios, unions are seeking additional time to explore potential takeovers and save the studio. Internal Microsoft documents suggest that the cessation of operations could begin by the end of 2026 and extend into the first quarter of 2027.
Microsoft has offered a non-committal response, stating to Le Monde that they "continue to explore various options for Arkane as part of the ongoing French consultation process" and are keeping the relevant committees and employees informed.
The future of Arkane Lyon's current project, Marvel's Blade, remains uncertain amidst these developments. Xbox had previously stated that publicly announced first-party games would not be cancelled as part of the recent cuts, implying Blade's safety. However, rumors earlier this year suggested the game was in jeopardy, though a subsequent report indicated it was over budget and targeting a 2027 release after an internal delay. The game was last seen in a teaser trailer in 2023.
This situation unfolds as Xbox CEO Asha Sharma continues a significant restructuring, with reports indicating several more rounds of layoffs may still occur before the end of the year.