Ethan Crossfield 
If you’re waiting on Arkane’s next big release, this week’s reporting is a serious red flag. Microsoft is reportedly weighing the closure or sale of Arkane Studios and canceling Marvel’s Blade—an upcoming, mature-rated third-person action-adventure that was previously expected to arrive later this year but is now understood to have slipped internally to 2027. Nothing is confirmed yet, but the timing lines up with a broader “Xbox reset” that could include more studio exits and layoffs.
What changed: Blade in trouble, Arkane under review
According to The Verge, Microsoft is considering two connected moves: shutting down Arkane Studios and canceling its next announced project, Marvel’s Blade. Arkane is best known for the Dishonored series and for Deathloop, the studio’s Xbox-published release under the Arkane Lyon banner.
The report also adds context on why Blade may be vulnerable. The game has not shown gameplay publicly, but it’s been described as a single-player, mature-rated third-person action-adventure set in Paris. Internally, sources say Blade’s debut—originally expected later this year—was pushed to 2027, and the project is reportedly running over budget. In other words: even before any cancellation talk, the development situation appears strained.
Who is affected: Arkane’s history and a wider Xbox shake-up
Arkane Studios is not a new addition to Xbox’s portfolio. The studio was acquired in 2021 as part of Microsoft’s larger ZeniMax purchase, which also brought Bethesda and id Software under the Xbox umbrella.
However, Arkane’s future may be judged differently depending on which branch is involved. Arkane Lyon is the team tied to Deathloop, while Arkane Austin—responsible for 2019’s Prey—was shut down by Xbox in 2024 after Redfall (released in 2023) received a negative reception.
The Arkane report arrives alongside broader claims about multiple studio exits. On June 15, reports surfaced that Microsoft planned to close or sell various studios, with five named so far: Compulsion Games (South of Midnight), Double Fine (Psychonauts), Ninja Theory (Hellblade), and Undead Labs (State of Decay), in addition to the newly discussed Arkane. The same reporting suggests these studios are at different stages of negotiations, while studios not shuttered are still expected to face layoffs.
What comes next: end-of-quarter calls and the likely window for answers
At this point, Microsoft has not made official announcements or confirmations. The Verge frames the lack of confirmed action as likely tied to timing—next week’s end-of-quarter financial calls. In practical terms for players, that means the uncertainty could finally narrow soon, especially for anyone tracking Arkane and Marvel’s Blade.
This is also not the first public mention of Blade. A week earlier, Entertainment Weekly published a feature on Xbox’s current situation, including brief comments from Bethesda’s Todd Howard. He indicated he couldn’t share when more would be revealed, but he referenced seeing new material and described Arkane as doing excellent work—comments that, in retrospect, now sit alongside the cancellation/closure report.
Until Microsoft speaks directly, the safest takeaway is to treat Blade’s status as unconfirmed and potentially fluid—particularly given the reported internal delay and budget issues.
What players should know
- Marvel’s Blade is reportedly at risk of cancellation, with Arkane Studios also allegedly facing closure or sale—per The Verge sources.
- Blade’s described pitch is a single-player, mature-rated third-person action-adventure set in Paris, but no gameplay has been publicly shown.
- Sources claim Blade’s internal timeline slipped to 2027 and the project is reportedly over budget, both of which increase uncertainty.
- The reporting is part of a wider “Xbox reset” narrative, with other studios named as potential closures or sales and layoffs expected even for studios that remain.
Expert View
If the report is accurate, it signals a very hard shift toward cost control at Xbox—especially for projects without public gameplay and with budget pressure. That doesn’t automatically mean Arkane’s work is “over,” but it does mean players should avoid assuming Blade is on track until Microsoft confirms what happens next. Watch for next week’s end-of-quarter communication, since that’s the most likely moment the company addresses these rumors directly.
