Arkane Lyon, the studio behind immersive sim titles like Dishonored 2 and Deathloop, is currently undergoing consultations regarding its future following Microsoft's widespread layoffs. French labor laws have provided a temporary buffer, preventing the abrupt changes seen with other Xbox studios, but the studio's long-term prospects remain uncertain. Xbox CEO Asha Sharma confirmed in a memo that Arkane Lyon's management is beginning required consultations with its Works Council to review potential strategic options.
According to former Kotaku editor Stephen Totilo, Arkane Lyon is slated for an exit similar to other former Xbox Game Studios entities, including Double Fine, Undead Labs, Compulsion Games, and Ninja Theory. Unlike abrupt U.S. layoffs, French law mandates a more extended consultation process for significant workforce changes. This legal framework means Microsoft cannot unilaterally explore options such as a sale, management buyout, or shutdown until these consultations conclude.
This situation starkly contrasts with the fate of Arkane Austin, the studio's Texas-based counterpart, which was shut down by Microsoft in early 2024. The future of the recently announced Marvel's Blade game, which Arkane Lyon is developing, is contingent on the studio's eventual outcome. There is speculation that these negotiations could still lead to over 100 layoffs at Arkane Lyon, depending on the final structure of its future.
Arkane Lyon has a storied history in the immersive sim genre, dating back to its acclaimed 2016 title Dishonored 2. Its most recent release was 2021's Deathloop. The studio's design pedigree extends back to influential studios like Origin Systems and Looking Glass Studios. The possibility of its unique design legacy concluding due to corporate decisions has been a point of concern for fans of the genre.