The future of Marvel’s Blade remains unclear as Microsoft tries to sell or close its developer, Arkane Lyon.
Today, as part of a significant reorganization at Microsoft’s gaming business, Xbox CEO Asha Sharma said Arkane’s management “is beginning required consultation with its Works Council to review potential strategic options.” As a French studio, Arkane must follow the country’s labor laws around a potential sale or closure, and this process may take some time. Meanwhile, the future of Marvel’s Blade, which was in development at Arkane Lyon, remains unclear. Will it be released? Is it canceled? Could another company pick it up, with Arkane Lyon potentially continuing development?
IGN has asked Marvel Games for comment, and Microsoft has yet to expand on Sharma’s statement.
The Verge reported that Marvel’s Blade was delayed internally to late 2027 and was running over budget. IGN understands this to be accurate, but neither Microsoft nor Marvel has suggested a release window. Blade, from the team behind Deathloop, was announced in December 2023 with a reveal trailer, but we’ve seen nothing of it since.
Last month, Bethesda Game Studios head Todd Howard was quoted as saying he’d recently seen what Arkane Lyon was cooking up and was impressed. “I’m not at liberty to say when [we’ll see more],” Howard teased, “but I saw some stuff just yesterday [on May 21] and the folks at Arkane [Studios, the developers] are doing a really, really great job.” Fans first began to fear the worst after Blade was a no-show at last month’s Xbox Games Showcase.
Today, Microsoft announced 3,200 staff are set to lose their jobs at Xbox across the current financial year, with 1,600 of those layoffs happening today, July 6. In an email sent to staff, Sharma called it the most “significant” restructure in Xbox history, insisting Microsoft’s gaming business “is not healthy.” Overall, Xbox is losing about one-fifth of its staff as part of Sharma’s push for growth.
South of Midnight developer Compulsion Games and Psychonauts developer Double Fine Productions will return to management and transition to independent studios with their IP, catalog, and with “runway for their next games,” Sharma said. These games are so far unannounced. In Double Fine’s case, it leaves Microsoft with the Psychonauts IP.
Meanwhile, Hellblade developer Ninja Theory and State of Decay developer Undead Labs “have entered terms to join new ownership with funding to complete and grow Senua and State of Decay 3.” This suggests both games will release eventually, developed under new ownership. Microsoft did not say who the new owners are.
Elsewhere, there are layoffs across other parts of Xbox, including Activision, Bethesda/ZeniMax, Blizzard, King, Mojang, and Xbox Game Studios. Microsoft insisted none of its first-party publicly announced games or projects are being cancelled as part of these reductions. That means the likes of Fable, Gears of War: E-Day, Clockwork Revolution, Call of Duty: Modern Warfare 4, Minecraft Dungeons 2, and The Elder Scrolls 6 are safe.
We have much more on this developing story over at our live blog, which we will continue to update as today’s news unfolds.
Wesley is Director, News at IGN. Find him on Twitter at @wyp100. You can reach Wesley at wesley_yinpoole@ign.com or confidentially at wyp100@proton.me.
