Microsoft considers wider Xbox cuts and possible Arkane sale
The company is weighing studio closures, sales and game cancellations as layoffs loom across its Xbox division, The Verge reported.
By James Whitfield · Staff Writer
2 min read
Microsoft is preparing another round of cuts across its Xbox gaming business that could include studio closures, sales of studios and canceled projects, The Verge reported. The review matters because it could affect several well-known Xbox developers, including Arkane Studios, the France-based team behind the planned Marvel’s Blade game.
The Verge, citing people familiar with Microsoft’s plans, reported that layoffs are expected to be announced next week for Xbox studios and staff. The report said Microsoft is considering closing at least five studios as part of the cost-cutting effort.
Among the decisions under review is the future of Marvel’s Blade, according to The Verge. Microsoft wants to cancel the game as part of the planned reductions in Xbox, the outlet reported, while also looking at options to sell Arkane Studios.
Blade project faces delay and budget pressure
Arkane Studios is best known for the Dishonored series. According to The Verge, Marvel’s Blade had originally been expected to arrive later this year, based on people familiar with the game’s development.
The project’s internal release target has since moved to late 2027, The Verge reported. The game is also over budget, according to the same report.
Microsoft has not announced a cancellation of Blade or a sale of Arkane. The Verge described the plans as under consideration, rather than final decisions.
Other Xbox studios may seek buyers
The potential Arkane sale would fit a broader set of options Microsoft is considering for parts of its gaming group. Bloomberg reported earlier this month that Microsoft was trying to spin off Compulsion Games, Double Fine and Ninja Theory.
GamesBeat reported this week that Microsoft is actively seeking a buyer for Undead Labs, the studio behind State of Decay. The Verge reported that studios that find buyers could avoid closure, though discussions may take months in some cases.
Compulsion Games, which developed South of Midnight, has already concluded that a shutdown is likely and has begun telling employees to seek jobs elsewhere, according to The Verge.
The planned cuts would add to a period of strain inside Microsoft’s gaming division, which has absorbed multiple studios through acquisitions while also facing pressure to reduce costs. The Verge reported that the upcoming layoffs could bring studio closures or spinoffs, potential mergers between studios and the end of some games in development.
The scope and final shape of the reductions remain uncertain. According to The Verge, Microsoft is weighing multiple outcomes across its Xbox studios ahead of the expected announcements next week.
This story draws on original reporting from The Verge.