Tom Warren just confirmed that Arkane Lyon is among the studios being considered to be sold off or closed, specifically a sell-off for Arkane, with Xbox considering cancelling Marvel's Blade as part of it's cost cutting initiative. It is among 5 studios he has heard from his sources are being considered for sale or closure, which are Arkane, Ninja Theory, Undead Labs, Compulsion, and Double Fine.
Xbox is weighing up canceling its Marvel's Blade game and shuttering Arkane. Microsoft could shut at least five studios as part of big Xbox layoffs starting next week. Details 👇 https://t.co/nAzgWfltcm
— Tom Warren (@tomwarren) June 30, 2026
The real surprising one to me there though is not Arkane though, afterall Arkane Lyon's last 3 games each performed under expectations (Deathloop, Wolfenstein Youngblood, and Dishonored: Death of the Outsider being the 3 that underperformed), and their last game was 5 years ago with Marvel's Blade reportedly 2028 at the earliest. Undead Labs is the surprising one to me. Yes, they have had major behind the scenes issues on State of Decay 3, there were like 2 years, 2021 and 2022 as I recall, where they got virtually nothing done according to behind the scenes reports from Kotaku. But they seem to be running smoother now, and State of Decay 3 is just a year off from release. Better at this point to let them finish it, recoup some of the development costs, and then decide whether or not to close them based on whether or not they fully recoup the development costs and start to turn a profit on the game. State of Decay isn't exactly a small series afterall, the 2nd game hit 10m players in 3 years.
