The Verge reports Microsoft plans to close Arkane Studios, maker of Dishonored and Deathloop, unless a buyer emerges, and wants to cancel Marvel’s Blade as part of wider Xbox cuts — though Microsoft has not confirmed any of it.
- The Verge, citing anonymous sources, reports Microsoft plans to close Arkane Studios unless a buyer is found.
- Microsoft reportedly wants to cancel Marvel’s Blade, whose internal ship date had slipped to late 2027 and was running over budget.
- Bloomberg earlier named Compulsion Games, Double Fine, Ninja Theory and Undead Labs as Xbox studios facing closure.
- Microsoft is expected to announce the full extent of its Xbox layoffs the week following the report.
- Unionised Xbox workers said they "will not be treated as disposable", and Diablo 4 artist Mahreen Fatima accused Microsoft of "choosing not to protect us".
Arkane Studios, the France-based developer behind Dishonored and Deathloop, is reportedly set to close as part of a sweeping wave of cuts across Microsoft’s Xbox division — and its in-development Marvel game Blade is on the chopping block too. None of this is confirmed by Microsoft. As reported by Video Games Chronicle, citing The Verge, the studio faces shutdown unless Microsoft can find a buyer, the latest name in a restructuring that has already put several other Xbox teams in the firing line.
For a studio with Arkane’s pedigree, that’s a heavy line to read. This is the team that built one of the most respected bodies of work in the immersive-sim space, and it is now being measured against a balance sheet.
Is Arkane Studios closing
According to The Verge’s reporting, Microsoft plans to close Arkane unless it finds a buyer for the studio. The claim sits inside a larger story about job losses planned across the Xbox gaming division, described as a major “reset” driven by Xbox CEO Asha Sharma.
Treat the specifics as reported, not settled. The closure claim comes from anonymous sources via The Verge, and neither Microsoft nor Arkane has commented on the record. Arkane is best known for the Dishonored series, including Dishonored 2 and Dishonored: Death of the Outsider, and worked alongside Machine Games on the Wolfenstein titles. Its last release was the critically praised 2021 shooter covered in earlier Xbox reporting — Deathloop.
Is the Marvel Blade game cancelled
The Verge says Microsoft wants to cancel Blade as part of the same cost-cutting. “Sources tell me Microsoft wants to cancel Blade as part of a wave of cost cuts and job losses that are planned for the company’s Xbox gaming division,” the publication reported.
The development picture, again per The Verge’s sources, was already shaky. The game was originally meant to arrive later this year, but the internal ship date reportedly slipped to late 2027, and it was running over budget. Blade was announced at The Game Awards in 2023 and has had little public showing since. A late ship date and a ballooning budget are exactly the kind of figures that make a studio look expendable when the spreadsheet comes out — fair or not.
Which Xbox studios are facing closure
Arkane is the latest name on a list that has been growing for weeks. Earlier reporting from Bloomberg named Compulsion Games, Double Fine and Ninja Theory as developers at risk, with Undead Labs later reported as a target too. The full picture of who survives, who merges and who spins off is expected to firm up when Microsoft makes its formal announcement, which The Verge expects next week.
| Studio | Reported status |
|---|---|
| Arkane Studios | Reportedly facing closure (buyer being sought); <em>Dishonored</em>, <em>Deathloop</em>, <em>Blade</em> |
| Compulsion Games | Reportedly facing closure; <em>We Happy Few</em> |
| Double Fine | Reportedly facing closure; <em>Psychonauts</em> series |
| Ninja Theory | Reportedly facing closure; <em>Hellblade</em> series |
| Undead Labs | Reportedly facing closure; <em>State of Decay</em> series |
The Verge believes the upcoming announcement will bring studio closures or spinoffs, potential mergers and cancelled games. Read the earlier wave of closure and spin-off reports for how this pattern took shape.
How Xbox workers are responding
The people inside the company are not taking it quietly. On Monday, unionised Xbox workers said they “will not be treated as disposable” ahead of the expected layoffs.
At a press conference, Diablo 4 senior environment artist Mahreen Fatima pointed at the gap between Microsoft’s AI spending and its planned cuts. She argued the company had spent billions on AI tech, that Microsoft is “choosing not to protect us”, and demanded proof it is short enough on money to justify mass layoffs at Xbox. That tension — record AI investment on one side, studio closures on the other — is the question every affected developer is asking. The same leadership team recently scrapped an Xbox AI feature before launch, so the picture is not one-directional, but the optics of the cuts remain ugly.
What it means for Game Pass players here
For Xbox players in the UAE and across the region, the stakes are about pipeline. Microsoft has leaned hard on first-party studios as the engine of Game Pass value, and shrinking that roster of teams means fewer marquee releases over time. If Arkane goes, a future Dishonored-calibre game goes with it.
What happens to the Dishonored and Deathloop rights if the studio closes has not been addressed in the reporting, and there is no word on how many Arkane staff would be affected. Until Microsoft speaks, every part of this remains a report rather than a confirmed plan — but the direction of travel for Xbox’s studio system looks like contraction. The cuts cycle has hit publishers across the board lately, including layoffs that followed a record launch elsewhere.
As reported by Video Games Chronicle, citing The Verge Video Games Chronicle (VGC)
FAQ
Is Arkane Studios being shut down?
According to The Verge, Microsoft plans to close Arkane Studios unless it can find a buyer, as part of a broader wave of Xbox cost cuts and layoffs. Microsoft has not confirmed this on the record, so it should be treated as reported rather than confirmed.
Is the Marvel Blade game cancelled?
Sources cited by The Verge say Microsoft wants to cancel Blade. The game’s internal ship date had reportedly slipped from later this year to late 2027, and it was running over budget. There is no official confirmation from Microsoft.
Which Xbox studios are facing closure?
Reports name Arkane Studios, Compulsion Games, Double Fine, Ninja Theory and Undead Labs as developers facing potential closure as part of Microsoft’s Xbox restructuring.
What games has Arkane Studios made?
Arkane is best known for the Dishonored series, including Dishonored 2 and Dishonored: Death of the Outsider, and the 2021 shooter Deathloop. It also worked with Machine Games on the Wolfenstein titles and was developing Marvel’s Blade.
When will Microsoft announce the Xbox layoffs?
The Verge expects Microsoft to announce the full extent of its Xbox layoffs the week following the report, which it believes will include studio closures, spinoffs, potential mergers and cancelled games.
