Microsoft is actively seeking a partner to help fund and support Arkane Lyon through the remaining development of Marvel's Blade. The company has also extended the deadline for finding a buyer for the studio by one month, a move that could potentially save the jobs of its 217 employees.
Arkane Lyon was initially slated to find a new owner by November 13, following Microsoft's earlier decision to close the studio as part of widespread layoffs. However, French labor laws complicated an immediate closure, prompting Microsoft to reconsider its timeline. "We have extended the consultation period by one 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. "This is a defined extension, and we remain committed to keeping the Works Council informed throughout the process."
The studio was first notified of Microsoft's intentions on July 16, a decision that impacted several other Xbox studios including Compulsion Games, Double Fine Productions, Ninja Theory, and Undead Labs. While Ninja Theory was ultimately closed, the other studios were granted independence. These cuts resulted in over 1,600 job losses across Microsoft's gaming division.
Despite the uncertainty, sources suggest Arkane Lyon may still be saved. Journalist Jason Schreier noted on BlueSky that multiple avenues are being explored to keep the studio operational. He highlighted that closing a game studio, particularly in France with its extended severance requirements, incurs significant costs, which Xbox may be seeking to avoid. "Xbox doesn't want to take on those costs," Schreier stated.
A union representative has advocated for the re-employment of affected staff within other Xbox studios if a deal for Arkane Lyon cannot be reached, noting the current limited prospects within the broader video game market. The union has not ruled out legal action, suggesting Microsoft's divestment aims to cut costs and boost short-term profitability.
Marvel's Blade, announced in December 2023, was reportedly on track for a reveal early next year and a release in the fourth quarter of 2027. Bethesda Game Studios head Todd Howard previously expressed his admiration for Arkane Lyon's work on the title, stating in May that the studio was doing a "really, really great job."