Arkane Lyon has a little more time. Microsoft has confirmed that it is extending the consultation period on the proposed closure of the Dishonored and Deathloop studio by one month, pushing the deadline from November 13 to December 13 as it continues searching for a way to keep the team and its upcoming Marvel's Blade alive.
In a statement to the press, Microsoft said "We have extended the consultation period by one additional month as we explore options, including finding a partner to support the studio through the development work still ahead. This is a defined extension, and we remain committed to keeping the Works Council informed throughout the process."
Why Arkane Lyon Is On The Clock
Arkane Lyon was named among the studios Xbox planned to divest during the major restructuring of its business over the summer. If the studio were located in the United States, Microsoft could have simply shut it down, but French labor law works differently.
Under France's Florange Law, companies of Microsoft's size have to carry out a genuine search for a buyer before closing a site that involves large-scale layoffs. That search began in the middle of the summer, and the consultation with the studio's staff representatives was set to wrap up on November 13. Around 217 jobs are on the line.
The studio's unions had been pushing for more time to find a buyer and work through the redundancy talks, and the extra month gives them that. Microsoft has also stressed that the closure documents filed as part of the process do not represent a final decision.
A Partner For Marvel's Blade
The most interesting part of Microsoft's statement is the mention of a partner to support the studio through the rest of development. That suggests a deal could take a few different forms, such as an outright sale of the studio or another publisher helping fund Blade to completion.
Marvel's Blade was first revealed at The Game Awards in December 2023 and entered full production the following year. Bethesda boss Todd Howard praised the work being done on the game earlier this year, though reports of trouble at Arkane surfaced not long after.
A union representative has said the game is nearing the end of production and that it would be a "monumental waste" if it went unreleased. Microsoft has previously said it is actively seeking a partner to support the next phase of development and enable the commercialization of the project.
Bloomberg's Jason Schreier has also weighed in, writing that "there are multiple paths actively being explored that would save Arkane Lyon," and that he would "be surprised if the studio is shut down." He also said that there is no scenario where Arkane stays part of Xbox, so whatever happens, the studio's future looks to be outside of Microsoft.
A Rough Year For Xbox Studios
Arkane Lyon is one of many teams affected by Xbox's restructuring under CEO Asha Sharma. The company has set out to cut around 3,200 roles across the division, and the shake-up has already seen Double Fine, Compulsion Games and Undead Labs go independent, while Ninja Theory looks set to close.
For fans of immersive sims, Arkane's situation has been especially worrying. The Lyon team has built a reputation for creative level design and player freedom with games like Dishonored, Dishonored 2 and Deathloop, and Blade looked set to bring that approach to a Marvel game.
Its sister studio, Arkane Austin, was closed by Microsoft in 2024 following the troubled launch of Redfall, which makes the fight to save the Lyon team feel even more important to longtime fans.
What Happens Next
December 13 is now the date to watch. If a partner or buyer is found before then, Arkane Lyon could survive and finish Marvel's Blade under new ownership. If not, Microsoft could move ahead with closing the studio after the consultation period ends.
Given Schreier's comments and Microsoft's own wording, there seems to be real momentum behind a deal, but nothing has been finalized, and the coming weeks will decide the fate of one of the most respected studios in the industry.
Do you think Arkane Lyon will find a partner to finish Marvel's Blade, or is the studio running out of time?
Let us know your thoughts in the comments below.