Arkane Studios Faces Possible Closure as Xbox Ends Support

In July, Microsoft announced a "reset" for Xbox, a euphemism for the more than 3,000 layoffs it plans to carry out at Xbox between July 2026 and 2027. Those layoffs included a couple of studios being forced to go independent, but the fate of others was unclear. Microsoft told the management of Arkane Studios, the developer of Dishonored and Marvel's Blade, on July 16 that it intended to close the studio. But because Arkane is based in Lyon, France, Xbox has had to comply with French labor laws and therefore could not close Arkane right away.

Instead, Microsoft and Arkane entered into a three-month consultation period during which Microsoft was required to find a buyer for Arkane while consulting on and negotiating a job protection plan for affected employees. According to a new report from the French outlet Le Monde, Arkane has until Nov. 13 to be purchased.

"Negotiations on the redundancy plan are going badly," a representative of the Printemps Écologique (Ecological Spring) union, identified in the report as Simon, told Le Monde.

Along with the French Video Game Workers' Union (STJV), the unions are trying to extend the deadline for the redundancy plan negotiations and the search for a buyer. "Several forms of takeover are being considered," union representative Simon said.

The future of Arkane

A Printemps Écologique union representative wants negotiations to include measures that "enable the re-employment" of employees who are laid off. "The redundancy plan must be adapted to the video game market where, currently, the prospects for returning to work are extremely limited," he said.

"How can this be justified when Microsoft's annual net profits are in the hundreds of billions of dollars?" the French Video Game Workers' Union wondered. Simon said, "We are collateral victims of Xbox's change in strategy." According to him, Arkane's next game, Marvel's Blade, is "nearing the end of production."

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Marvel's Blade was announced almost three years ago at the 2023 The Game Awards. Arkane has been quiet about it since, and it was internally delayed until late 2027. With Arkane possibly shutting down in the near future, it is possible the game never sees the light of day.

The unions fighting for Arkane haven't ruled out taking Microsoft to court to challenge its economic justification for wanting to close Arkane. "This is in complete contradiction with what we've been told in the Works Council for years about the company's financial situation," union rep Simon said. "Microsoft is looking to divest itself of Arkane, even though the studio is doing well, in order to save money and improve the profitability of its short-term investments."