Arkane Studios, the developer behind the Dishonored series and the upcoming Marvel's Blade, is reportedly among five studios that Microsoft is considering closing as part of a significant organizational 'reset'. This information comes from a report by The Verge, which cites sources familiar with Microsoft's plans.
If these closures proceed, Arkane would join Compulsion Games, Ninja Theory, Double Fine, and Undead Labs, whose futures are also reportedly under discussion with the company. The potential shuttering of Arkane could lead to the cancellation of its currently in-development action game, Marvel's Blade.
The report also suggests that layoffs are scheduled to begin on July 6, following the conclusion of Microsoft's fiscal quarter. While these five studios are specifically mentioned, cost-cutting measures and staff reductions are expected to affect other areas of the Xbox division. Some studios might be merged with others, sold, spun off into independent entities, or entirely closed.
Marvel's Blade was reportedly slated for release in late 2026 but was internally delayed to late 2027, with sources indicating the game has exceeded its budget. Rumors of the game's cancellation surfaced in early June.
The scale of these impending layoffs appears to be unprecedented for Xbox, with some estimates suggesting that at least 1,000 jobs could be lost. These actions are reportedly part of new CEO Ash Sharma's strategy to reshape the Xbox division into a more financially sound business.