Microsoft gives Arkane Lyon one more month to find a buyer

Microsoft extended Arkane Lyon’s consultation period by one month on Oct. 23, 2026, giving the France-based studio until November 13 to find a buyer or face closure.

Arkane Lyon employs 217 people, and about 217 jobs are exposed to layoffs under Xbox if the studio is not divested. Union representatives inside the studio warned that multiple takeover paths are being weighed.

The process exists because Arkane Lyon is based in France, where Xbox could not close the studio immediately and instead opened a mandatory consultation on strategic options. France’s Florange Law requires companies with more than 1,000 employees to search for a buyer before closing a facility, governed by French buyer-search rules for large employers. That buyer-search obligation fixes Arkane’s deadline at November 13.

Unions Printemps Écologique and the Syndicat des Travailleureuses du Jeu Vidéo sought to extend the November consultation deadline so redundancy negotiations and the buyer search could continue. Microsoft granted the extra month and pledged to keep the Works Council informed. A Microsoft representative said the closure documents belong to the mandated consultation process and are not a final decision.

We have extended the consultation period by one additional month

a Microsoft representative, Yahoo! Finance

On July 16, Arkane management told staff that Xbox intended to close the studio, a notice that arrived 10 days after the layoffs were announced. Papers signed in July and posted to a French government site on Aug. 10 cite a complete, permanent end to the company’s activity and the economic dismissal of all staff. The documents were cited as proof that closing Arkane and dismissing staff is an option on the table. Microsoft later characterized the same documents as routine consultation paperwork rather than a final choice.

The July layoffs are part of a broader Xbox restructuring announced by new CEO Asha Sharma that will put roughly 3,200 people out of work as part of a major restructuring. Sharma’s restructuring came amid studio closures and sales and put Arkane Lyon into a mandated sale process. In that reset, Xbox divested four studios: Double Fine, Compulsion Games and Undead Labs went independent, while Ninja Theory appears to be closing outright. Undead Labs became employee owned, while Xbox spun off Double Fine and Compulsion Games, and Ninja Theory started cutting staff after two rescue attempts failed, with Undead Labs quickly cutting staff after going independent.

Xbox shut down sister studio Arkane Austin in 2024 after its multiplayer vampire shooter Redfall failed to live up to expectations. Microsoft bought Arkane in the 2021 ZeniMax acquisition, and Arkane Lyon built Dishonored and Deathloop. Arkane Lyon and Arkane Austin have different leadership.

Arkane Lyon is developing Marvel’s Blade, revealed at the 2023 Game Awards. People close to the studio say the game still needs years before development finishes and has received no other updates. Microsoft’s extension notice also cited the development work still ahead. Union representatives speaking to Le Monde say Blade is nearing the end of development and that abandoning it incomplete would be a monumental waste, arguing the game is a reason to keep Arkane Lyon open.

Xbox reportedly wanted to cancel Marvel’s Blade entirely, and the game’s progress has not been updated since its 2023 announcement. Marvel Studios reportedly shelved the standalone Blade film in favor of a Midnight Sons movie after years of rewrites and director changes, leaving Arkane’s game to reintroduce the character without an MCU marketing boost.

Without an MCU Blade film, Arkane’s game bears sole responsibility for making the character relevant again, since Blade lacks recent blockbuster adaptations, animated shows, or merchandise. Younger players may know the character only from Marvel Rivals or a Deadpool cameo, leaving the game to carry the franchise alone. Redfall’s troubled launch bruised Arkane’s brand, leaving Marvel’s Blade as a possible redemption arc and a key test of the studio’s long-term reputation.

Arkane founder Raphael Colantonio asked, perhaps seriously or perhaps not, about the price to buy the studio from Xbox. Colantonio’s question about buying the studio back stands as one possible rescue route for the developer.

how much it'd cost to buy the studio back from Xbox

Raphael Colantonio, Kotaku