Arkane Lyon staff fear closure as Marvel's Blade hangs in the balance

Microsoft's Game Pass economics are putting another beloved studio at risk. Multiple employees at Arkane Lyon — the team behind Dishonored, Deathloop, and the in-development Marvel's Blade — have told journalist Mike Straw there is "real concern" they're next on Xbox's closure list. The warning comes one day after Xbox confirmed the shuttering of Ninja Theory, Compulsion Games, and Double Fine on June 16.

The pattern

The closures aren't random. Under new Xbox head Asha Sharma, Microsoft is executing what insiders describe as a structural reset — cutting studios that make critically praised, narratively rich single-player games that don't reliably convert subscribers or drive Game Pass growth. Arkane Lyon fits that profile exactly. Its games are acclaimed but niche; Dishonored and Deathloop built devoted audiences without becoming mass-market blockbusters.

The Austin branch of Arkane was already shut down in May 2024 following the disastrous launch of Redfall, a live-service co-op shooter that almost nobody played. Lyon was assumed safe — it had a flagship project in Marvel's Blade, an action game set in Paris announced in 2023. The game only entered full production in late 2024, and no gameplay footage has surfaced since a brief teaser and some concept art.

What's actually known

The situation is murky. Insider Jeff Grubb initially floated a 70% cancellation probability for Marvel's Blade, then walked the claim back, per WCCFtech. Xbox executive Matt Booty has hinted the project is still alive, and Arkane Lyon creative director Dinga Bakaba publicly reaffirmed it in December 2025. No official statement has come from Microsoft or Arkane Lyon about the studio's fate.

Mike Straw (Insider-Gaming) says some of the employees who reached out to him are senior staff, not junior workers spooked by headlines — which makes the concern harder to dismiss. The June 16 closures confirmed by TechTimes represent the most concentrated single-day contraction in Xbox's history, and the logic that drove them applies directly to Lyon.

The Blade problem

If Arkane Lyon closes before Marvel's Blade ships, it would mark a particularly sharp failure: a game set in Paris, built by a French studio, cancelled before players ever saw it move. A 2027 release has been rumored but never confirmed. Right now, no one outside Microsoft knows whether the studio survives long enough to finish it.