Arkane Lyon’s future is uncertain after Microsoft told the French studio in July that it intended to close it. The developer is known for Dishonored, Deathloop and the upcoming Marvel’s Blade.
Microsoft announced an Xbox “reset” in July, involving more than 3,000 job cuts across Xbox between July 2026 and 2027. Some studios were pushed towards independence, while the future of others remained unclear.
Because Arkane Lyon operates in France, Microsoft cannot close the studio immediately. French employment law requires a consultation process, including discussions about redundancies, job protections and the possibility of finding a buyer.
Arkane has until 13 November
Microsoft and Arkane entered a three-month consultation period. During that process, Microsoft was required to seek a buyer for the studio and negotiate a plan intended to protect affected employees. French outlet Le Monde reports that Arkane must be purchased by 13 November.
Union representatives say negotiations over the redundancy plan are progressing poorly. Printemps Écologique representative Simon said the unions, together with the French Video Game Workers’ Union, are seeking more time for both the employment discussions and the search for a buyer. Several takeover options are reportedly under consideration.
The unions also want any redundancy agreement to include measures supporting the re-employment of workers who lose their jobs. They argue that the plan should reflect the difficult employment conditions facing the video game industry.
What happens to Marvel’s Blade?
Marvel’s Blade was announced at The Game Awards in 2023. Arkane has shared little about the game since then, and the project was internally delayed until late 2027.
Simon said the game is nearing the end of production. However, if Arkane closes, there is a possibility that Marvel’s Blade may never be released.
The unions have not ruled out legal action against Microsoft over the proposed closure. The French Video Game Workers’ Union questioned the economic justification, noting Microsoft’s annual net profits and arguing that the studio is being divested to reduce costs and improve the short-term profitability of its investments.
There may still be a path forward
Closure is not yet certain. Bloomberg reporter Jason Schreier said that multiple options were being explored to save Arkane Lyon and that he would be surprised if the studio ultimately shut down.
“Anything can happen during negotiations, but at this point I’d be surprised if the studio is shut down.”
One possible outcome is independence. Other Microsoft-owned studios have returned to independent status, including Compulsion Games, the developer of South of Midnight. Independence would not necessarily prevent job losses: Double Fine reportedly cut around two dozen positions after becoming independent.
If no buyer is found by 13 November, Arkane Lyon could still be closed. The negotiations and sale process will determine whether the studio survives, changes ownership or continues as an independent developer.
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