Arkane Studios and its Blade game may be shuttered as part of upcoming Xbox layoffs

Rumors about Microsoft’s imminent mass layoff seem to get worse every day. As per The Verge, Microsoft is reportedly considering shutting down Arkane Studios, best known for the acclaimed Dishonored series, Deathloop, and Prey (2017). Xbox would also be canceling Arkane’s upcoming game based on the Marvel character Blade. Microsoft is reportedly set to announce widespread layoffs at its Xbox studios next week.

According to The Verge’s sources, Marvel’s Blade was originally supposed to debut later this year, but its internal ship date slipped to late 2027. It is also reportedly running over budget.

Blade was announced in December 2023, but Arkane hasn’t shown gameplay for the title yet. Unlike most of the studio’s output, the game will be presented from a third-person perspective rather than first-person. Arkane’s most recent release, Redfall, fell well short of expectations when it came out in 2023, receiving poor reviews and “minimal sales,” according to Microsoft.

The potential cancellation of Marvel’s Blade is just the latest case of this vampiric antihero not being able to catch a break. The MCU’s Blade film has been stuck in development hell for years, having gone through two directors and multiple cast members. Reports indicate it’s been scrapped in favor of a Midnight Suns movie.

If there’s a small upside, it’s that Arkane’s demise isn’t a certainty. While Microsoft is reportedly considering closing Compulsion Games (South of Midnight), Double Fine, Ninja Theory (Hellblade), and Undead Labs (State of Decay), in addition to Arkane, the company is also looking for buyers for these studios, which would avoid shutdowns. However, even if that were to happen, layoffs are still quite likely.

Following the retirement of Microsoft Gaming CEO Phil Spencer, Asha Sharma took over the role in February of this year. Since then, numerous Xbox executives have left the company, including head of Xbox Game Studios Craig Duncan and Xbox Game Studios chief of staff Louise O’Connor.

On June 10, Sharma and Xbox chief content officer Matt Booty posted an open letter announcing that they’re gearing up for a “reset” across the division. The message cites that the company has spent over $20 billion on Xbox investments over the past five years, but that annual revenue has declined by half a billion during that time. It also references hardware supply problems, game development pipeline issues that have led to a dearth of releases, and difficulties with platform infrastructure.

Insiders have alleged the impending reset will involve one of the biggest layoffs in gaming history. These job cuts are also expected to affect studios not slated for closure, such as Bethesda, Blizzard, and others.

The last few years have been a very difficult time for the video game industry writ large, with mass layoffs and studio closures. Unfortunately, it seems that somehow the worst is yet to come.