Microsoft has confirmed that it has extended the deadline for its French game studio Arkane Lyon to find a buyer by one month. The company is also considering bringing in an outside partner to help complete development on "Marvel's Blade." With the studio’s future still uncertain, all 217 employees remain at risk of losing their jobs.
According to an earlier report, Microsoft planned to shut down Arkane Lyon during its Xbox restructuring this summer. French labor laws prevented the company from moving ahead immediately, however, and the studio was originally given until November 13, 2026, to secure a buyer.
A Microsoft spokesperson told PC Gamer that the consultation period had been extended by an additional month while the company explored several options, including finding a partner to support the studio through the remaining development work. Microsoft also pledged to keep the Works Council updated throughout the negotiations.
Arkane Lyon was notified of the plan on July 16, 2026, as Microsoft restructured several other Xbox studios. Ninja Theory was shut down, while Compulsion Games, Double Fine Productions and Undead Labs shifted to independent operations. The broader round of cuts affected more than 1,600 jobs.
Bloomberg reporter Jason Schreier recently revealed on Bluesky that multiple options were still being considered to keep Arkane Lyon operating.
Schreier acknowledged that anything could happen during negotiations, but said he would be surprised if the studio ultimately shut down.
He added that France’s stricter severance requirements make closing a local studio extremely expensive, which could give Microsoft another reason to pursue an alternative solution.
Meanwhile, labor unions are demanding that Microsoft prioritize transferring affected employees to other Xbox studios if a deal cannot be reached. Union representatives said any layoff plan must reflect the current games industry job market, where opportunities to find new work are extremely limited. Negotiations remain underway, and the unions have not ruled out legal action.
As for "Marvel's Blade," no substantial gameplay footage has surfaced since its first trailer debuted in December 2023. According to information obtained by IGN, the game was originally expected to resurface in early 2027 before launching in the fourth quarter of that year. With talks over a sale or outside partnership still ongoing, Microsoft has yet to clarify whether the situation will affect the game’s development or release schedule.
via： IGN