Microsoft is reportedly evaluating the closure of Arkane Studios and cancellation of Marvel's Blade, according to The Verge citing anonymous sources familiar with the plans. The developer behind the Dishonored franchise was working on Marvel's Blade, originally scheduled for 2026 but internally delayed to late 2027 and is now over budget.
Arkane would be one of at least five studios Microsoft is considering shutting down as part of a broader cost-cutting restructuring. Other developers including Undead Labs (State of Decay), Double Fine, Ninja Theory, and Compulsion Games are also facing similar threats, recent reports indicate. The restructuring comes as CEO Asha Sharma announced measures to cut expenses across the gaming division.
The situation represents one of the largest cuts in industry history. Sources cited by veteran developers suggest this could be "the largest single layoff event in gaming history." Microsoft previously laid off approximately 1,900 gaming employees in January 2024.
Jean-Luc Monnet from Arkane addressed the rumors by denying Blade's cancellation on social media, but The Verge's sources claim discussions about the studio's future are ongoing internally. Final decisions are expected to be announced at the end of June when Microsoft's fiscal year closes.
