MachineGames co-founder takes over Arkane Studios as Xbox plots studio merger
Arkane Studios — the team behind Dishonored and Prey — may be getting a lifeline instead of a closure notice. Jerk Gustafsson, co-founder and studio director of MachineGames, was quietly appointed Arkane's president on June 30, replacing Leonard Bendel who resigned the same day. The move surfaced without any public announcement, spotted via a French legal filing, and points to a possible merger between the two Xbox-owned studios rather than an outright shutdown.
The studios
MachineGames, based in Uppsala, Sweden, is best known for its Wolfenstein revival and for Indiana Jones and the Great Circle, which launched in December 2024 to strong reviews and attracted more than four million players. Arkane, founded in Lyon, France, is the studio responsible for the Dishonored series and 2017's Prey. Both sit under Microsoft's Bethesda umbrella following the 2021 ZeniMax acquisition.
The two studios already have history together. They previously co-developed Wolfenstein: Youngblood, a co-op spinoff released in 2019. Arkane Lyon also contributed environments and animation work to Indiana Jones and the Great Circle, so there are established working relationships on both sides.
Arkane Studios news
— Timur222 (@bogorad222) July 4, 2026
Change of Leadership
Pursuant to the decisions of the sole shareholder dated June 30, 2026, it was decided to appoint Mr. Jerk GUSTAFSSON as President, replacing Mr. Leonard BENDEL, who resigned, effective from the same date pic.twitter.com/fD0rryLx5Z
The stakes
Arkane's position inside Xbox has been precarious. The studio's next major project, Marvel's Blade, was reported by The Verge to be over budget and pushed back to late 2027, raising real questions about the studio's future. Xbox CEO Asha Sharma has been running what she calls a "reset" of the company's gaming division, with major layoffs expected to be announced on July 6. At least five studios are reportedly under review for closure or sale.
Putting Gustafsson — whose Indiana Jones track record is hard to argue with — in charge of Arkane looks less like a routine reshuffle and more like a deliberate attempt to stabilize the studio before those announcements land. Windows Central framed the move as an alternative path to closure, while GamesBeat confirmed the appointment and noted Arkane's creative strengths despite its recent struggles under Microsoft.
What's still unclear
Microsoft has not officially confirmed whether this is a full studio merger, a shared leadership arrangement, or something else. Arkane Lyon remains a separate legal and operational entity for now. Whether Gustafsson's appointment changes the timeline or budget situation for Marvel's Blade is also unknown. All eyes are on July 6, when Xbox is expected to name which studios are being closed or sold — and whether Arkane makes it off that list.