Arkane's Marvel's Blade game is reportedly facing cancellation, and what remains of the studio could be sold off, as Microsoft weighs shuttering several more Xbox-owned studios ahead of a wave of layoffs expected to begin July 6.
Arkane and Blade face the chopping block
Rumors of studio closures have been swirling around Microsoft and Xbox for weeks, initially centered on Double Fine, Ninja Theory, and Compulsion. This past week, State of Decay developer Undead Labs was added to the list of studios Xbox acquired to bolster Game Pass but is reportedly now looking to shut down. The latest reports go further, indicating that what remains of Arkane Studios could be put up for closure alongside the cancellation of its Marvel's Blade game.
According to sources cited by The Verge, Blade was originally scheduled to release this year, but its internal target date slipped to next year, and the project has also gone over budget. Microsoft is reportedly looking to sell off Arkane entirely, consistent with the pattern already seen with the other studios under review, though The Verge notes that any acquisition talks could take months to play out.
Why Microsoft is reportedly cutting Xbox studios
The specific driver behind Blade's trouble appears to be a mix of schedule slippage and budget overruns, both of which have made the project a target as Microsoft looks to trim costs across its game studios. Arkane is far from alone: Undead Labs, Double Fine, Ninja Theory, and Compulsion have all been named in recent reporting as studios Xbox is evaluating for closure or divestment, suggesting a broader cost-cutting sweep rather than an isolated decision about one game or one team.
The July 6 layoffs and what's at stake
July 6 is the date sources told The Verge that layoffs at Xbox are set to begin, affecting most areas within the division. The cuts could total up to 1,000 roles. If the five studios currently being deliberated over end up closing, that would add another 500 job losses on top of that figure, even outside Xbox's own headcount.
Blade isn't the only project affected by Microsoft's cost-cutting. IO Interactive's still-unrevealed Project Fantasy has reportedly lost its external development partner, which Bloomberg has identified as Xbox itself pulling out of the collaboration. Hideo Kojima's mysterious horror project OD, on the other hand, is reportedly safe from the current round of cuts, according to IGN's reporting.
What this means for Xbox's game lineup
Losing Arkane and Blade would be a significant blow to Xbox's first-party lineup, which has leaned on Game Pass exclusives and acquired studios to fill out its release schedule. A sale of Arkane, rather than an outright closure, would at least keep the studio's talent working somewhere, even if not under the Xbox banner. For players, the more immediate impact is a project that had been in development for real, apparently workable time, potentially disappearing before any official reveal.
None of this has been officially confirmed by Microsoft, and the situation remains fluid ahead of the reported July 6 layoff date. Given how the Undead Labs, Double Fine, Ninja Theory, and Compulsion situations have played out in recent months, more concrete announcements are likely once the layoffs actually begin.
FAQ
Is Arkane's Blade game cancelled?
Reports citing The Verge indicate Blade is being cancelled amid schedule delays and budget overruns, though Microsoft has not officially confirmed the cancellation.
Is Arkane Studios closing?
Arkane is reportedly being considered for a sale rather than an outright shutdown, following a pattern already seen with other Xbox-owned studios under review.
When are the Xbox layoffs happening?
Sources told The Verge that layoffs across most of Xbox are set to begin July 6, potentially totaling up to 1,000 roles.
