Microsoft is reportedly contemplating the closure of Arkane Studios and the cancellation of its upcoming game, Marvel's Blade, as part of a significant "Xbox reset." This potential studio shutdown would be one of several anticipated within the next week, according to a report from The Verge.
News emerged on June 15 that Microsoft plans to either close or sell off multiple studios within its gaming division. While no official confirmation has been made, The Verge and GamesBeat have identified five studios potentially affected: Compulsion Games, Double Fine, Ninja Theory, Undead Labs, and Arkane Studios. These studios are reportedly in discussions with Microsoft regarding their future.
Arkane Studios, known for its work on the Dishonored series and Deathloop, is reportedly being considered for closure or sale. The Lyon-based studio was acquired by Xbox as part of its ZeniMax acquisition in 2021. Under Xbox, Arkane Lyon released Deathloop. Arkane's former Austin branch, which developed Prey, was closed by Xbox in 2024 following the reception of its game Redfall.
Marvel's Blade, Arkane Studios' next announced project, is an action game based on the Marvel character, revealed at The Game Awards 2023. The game has been described as a single-player, mature-rated, third-person action-adventure set in Paris. Sources indicate that Blade, initially slated for release later this year, has seen its internal launch date pushed back to 2027 and is reportedly exceeding its budget.
This news follows a recent feature by Entertainment Weekly that discussed the state of Xbox, including a comment from Bethesda's Todd Howard on Blade and Arkane. Howard stated on May 21 that he had seen "some stuff just yesterday" and that the Arkane team was "doing a really, really great job."
Speculation suggests that an official announcement regarding these changes may coincide with Microsoft's end-of-quarter financial calls, which are expected next week.