Featured image: official Deathloop artwork by Arkane Lyon via the Steam store page
The studio that made Dishonored and Deathloop has been living with a closure plan for more than three months, and the clock is now loud enough to hear. Arkane Lyon, the Xbox-owned team in France, reportedly has until November 13 to find a buyer or a partner before Microsoft can move ahead with shutting it down. On top of that, a union representative says the studio’s next game, Marvel’s Blade, is already nearing the end of production.
The story broke through French outlet Le Monde and spread quickly. It is also easy to get wrong, because several details have shifted since the first reports. Here is what is actually confirmed, what changed this week and what is still just a rumor.
The short version
- The plan: staff were told on July 16 that Xbox intends to close Arkane Lyon
- The people: 217 jobs are reportedly at risk
- The deadline: the French consultation was due to end on November 13
- The twist: Microsoft told PC Gamer it has extended the consultation by one additional month
- The game: Marvel’s Blade has not been canceled, and Microsoft says it is seeking a partner to finish it
- Not decided: Microsoft says the closure documents “do not represent a final decision”
How Arkane Lyon ended up here
This did not start in October. On July 6, Xbox CEO Asha Sharma announced a restructuring that included about 3,200 job cuts to be completed before the end of the fiscal year. Xbox also let go of four studios. Double Fine, Compulsion Games and Undead Labs went independent, and Ninja Theory is reportedly closing outright.
Arkane Lyon was swept into the same wave, but France plays by different rules. Microsoft could not simply hand out notices and turn off the lights. Under the country’s Florange Law, a company with more than 1,000 employees that wants to close a site has to search for a buyer first and run a formal consultation with the works council. That is the process now ticking down.
| Date | What happened |
|---|---|
| July 6 | Xbox announces its restructuring and roughly 3,200 job cuts |
| July 16 | Arkane Lyon management tells staff Xbox plans to close the studio |
| August 10 | Documents referencing a “complete and permanent cessation” of activity appear on a French government website |
| Late October | Le Monde reports the November 13 deadline, and Microsoft extends the consultation by a month |
| End of 2026 into early 2027 | When the proposed closure would begin if no deal is reached |
Arkane Lyon at a glance
Figures as reported by Le Monde, Vice, Wccftech and PC Gamer. Job numbers are not an official Microsoft figure.
What Microsoft has actually said
The company’s public position is careful. In a statement to PC Gamer it said: “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.” It called this “a defined extension” and promised to keep the works council informed.
On the closure paperwork, a Microsoft representative said the documents “are part of the required consultation process and do not represent a final decision.” In its statement to Le Monde, Microsoft also said it is “actively seeking a partner to support the next phase of development and enable the commercialization” of the Blade project.
Read closely, that is not a promise to save anyone. Wccftech pointed out that the wording stops short of committing to release the game and signals that Microsoft does not plan to keep funding the studio through the final stretch itself. It is an invitation for someone else to pick up the bill.
Where Marvel’s Blade stands
Marvel’s Blade was announced at The Game Awards in 2023 as a mature, single-player, third-person action game with an original story. Since then, official information has been thin. A union representative identified as Simon told Le Monde the game is nearing the end of production, and called the idea of it never releasing “a monumental waste, artistically, humanly, and commercially.”
That claim comes from the union side, not from Microsoft or Arkane, and nobody has confirmed a release window. Reports say the game was internally pushed back to late 2027, and one outlet relayed that a new reveal could come in early 2027. Treat those dates as unconfirmed.
Why a buyer is harder than it sounds
Blade is a licensed Marvel game. Whoever steps in needs the team, the technology pipeline and, crucially, a workable arrangement with Marvel and the original publisher. That is a much bigger ask than buying an empty office in Lyon.
Is there any hope?
There is some. Bloomberg’s Jason Schreier said on Bluesky that he understands multiple paths are being explored and that he would be surprised if the studio were ultimately shut down, while warning that anything can happen in negotiations. A union rep also told Le Monde that several takeover options are on the table, though talks over the redundancy plan are reportedly going badly.
Arkane’s co-founder Raphaël Colantonio, who now runs WolfEye Studios, has previously floated an interest in buying the studio back. It is unclear how serious that was, and nothing suggests a bid exists.
| Claim | Status |
|---|---|
| Staff were told Xbox intends to close the studio | Reported by Le Monde, backed by government-published documents |
| Closure is final | Not true. Microsoft says no final decision has been made |
| Consultation extended by one month | Confirmed by a Microsoft representative to PC Gamer |
| Marvel’s Blade is cancelled | Not confirmed. Microsoft is seeking a partner for it |
| Blade is nearly finished | Union claim only, not an official update |
| A buyer has been found | No buyer or partner has been named |
Part of a much bigger pattern
It is hard to read this in isolation. Arkane’s Austin studio, the team behind Prey and Redfall, was shut down about two and a half years ago after Redfall flopped. Now the Lyon team is on the clock while Ninja Theory is reportedly closing despite having a game announced for 2027. Just days ago we covered how EA closed BioWare after 30 years, and the same week saw Funcom cut more staff as its CEO stepped down. Big publishers are tightening everywhere, and studios with a distinct identity but a modest sales record are the first to feel it.
Meanwhile, Xbox is also reshaping how it makes money from players. If you want the other side of that picture, our breakdown of what Xbox now charges per hour to stream games you already own shows where the company thinks the revenue is.
What to watch next
- The extended deadline: roughly a month past November 13, which is when a decision becomes much harder to postpone.
- Any named partner: a publisher or investor willing to take on Blade and the team would change the picture overnight.
- Marvel’s reaction: a licensed game needs the rights holder on board, so silence from Marvel is worth noticing.
- Union statements: French unions have been the main source of detail throughout, and they are pushing for more time.
My take
I would be careful with any headline that says Arkane Lyon is closing. It is not, at least not yet. What is true is that Microsoft started a process designed to end with a closure, and it has been unusually quiet about whether it wants a different ending.
The extension is the most encouraging detail so far. Companies do not usually give themselves extra time unless somebody is on the other end of a phone call. Still, finding a partner who will take a nearly finished, expensive Marvel game plus a 200 person team is a tall order. If it works, Blade ships in some form. If it does not, we lose one of the last studios in big-budget gaming with a recognizable creative voice. I will update this story as soon as there is real news.
Sources: PC Gamer, Wccftech, Vice, GameSpot, VGC, Steam.
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