Arkane Lyon, the studio behind games like Dishonored and Deathloop, may still face closure, but has been granted an extension to find a new buyer. Initially reported by French outlet Le Monde, a deadline of November 13 was set for the studio to secure a buyer, after which Microsoft could potentially shut it down. However, Microsoft has now extended this period by one month to continue exploring alternative options.
Arkane Lyon was impacted by significant layoffs across Xbox earlier this year, which affected approximately 3,200 employees. In addition to Arkane Lyon, four other studios were affected: Double Fine, Compulsion Games, and Undead Labs became independent and subsequently carried out layoffs, while Ninja Theory appears to be closing. Due to French labor laws, Microsoft could not immediately close Arkane Lyon and instead entered a legally mandated consultation process to examine strategic alternatives.
According to the Le Monde report, Arkane management informed employees on July 16 that Xbox intended to close the studio. France's Florange Law requires companies with over 1,000 employees seeking to close a facility to first conduct a search for a buyer. The original November 13 deadline was set for this process.
Documents referencing a potential complete cessation of activities and dismissal of employees for economic reasons were published on a French government website on August 10. These documents are part of the required consultation process and do not represent a final decision, according to a Microsoft representative. The unions Printemps Écologique and STJV sought an extension to the consultation period to facilitate redundancy negotiations and the buyer search, which has now been granted.
"We have extended the consultation period by an additional month as we explore options, including finding a partner to support the studio through the development work still ahead," a Microsoft representative told PC Gamer, referencing the Marvel's Blade game currently in development at Arkane. "This is a defined extension, and we remain committed to keeping the Works Council informed throughout the process."
Arkane Lyon currently employs 217 people. Development on Marvel's Blade, announced at the 2023 Game Awards, is expected to continue for several more years.