Xbox is reportedly considering cancelling Marvel’s Blade and shuttering developer Arkane as part of wider cost-cutting measures.
According to The Verge, Xbox is “weighing” these options as the Marvel superhero game was originally slated internally to launch this year but was pushed to late 2027, leading to it going over budget. Marvel’s Blade was unveiled at The Game Awards in 2023 with a cinematic trailer, although we haven’t actually seen anything from the game since. Notably, Bethesda veteran Todd Howard (Skyrim, Fallout) recently told Entertainment Weekly that he just saw some of the game in May and praised Arkane for doing a “really, really great job” with it.
The Verge notes that Xbox is exploring options to sell the Lyon, Paris-based Arkane, the team behind acclaimed games like 2021’s Deathloop and the Dishonored series. Xbox shuttered Arkane Austin, the company’s American division that made 2017’s celebrated Prey and 2023’s critically panned Redfall, in 2024 alongside multiple other studios.
The news about Marvel’s Blade and Arkane comes amid reports of Xbox’s larger plans for mass layoffs. Over the past few weeks, it’s been reported that Xbox is planning to close Montreal’s Compulsion (South of Midnight), San Francisco’s Double Fine (Psychonauts) and Cambridge, England’s Ninja Theory (Hellblade).
While reports suggested that Xbox is looking to try to sell the studios first, The Verge notes that these deals could take months, leading to some of the leadership, including those at Compulsion, to advise employees to start seeking other work. Additionally, it has since been reported that Seattle-based Undead Labs (State of Decay) could also be closed alongside State of Decay 3 being cancelled.
In total, that would be at least five Xbox studios that are at risk of closure, which would result in around 500 jobs being lost. The Verge adds that at least an additional 1,000 employees could be cut at other Xbox divisions. The outlet says these Xbox layoffs are expected to begin on July 6 after Microsoft’s new fiscal year begins on July 1.
Of course, layoffs are always heartbreaking, but it’s especially maddening in this case because it comes after Microsoft, despite being one of the wealthiest corporations in the world that regularly beats revenue expectations, has made many bad bets. For one, it’s been investing many billions into AI — a fraction of which could have gone towards keeping these studios afloat. That AI spend has come at great loss, while these game makers — even those behind less commercially successful works — are at least bringing some return on investment.
And to that point, Bloomberg‘s Jason Schreier even reported that studios like Compulsion were told to pursue more artistic and original games like South of Midnight, even if they didn’t sell millions of copies, both because they help fuel Xbox Game Pass catalogue and can win awards and other accolades. (Just a few weeks before the news about Compulsion’s impending closure, South of Midnight won seven awards at The Canadian Game Awards, including Game of the Year, and that came after wins from prestigious bodies like the BAFTAs and Peabody.)
Xbox also shouldn’t have invested in so many mergers and acquisitions, including its record US$69 billion buyout of Activision Blizzard, if it wasn’t willing to actually support all of these studios. All of these studios on the chopping block are ones that Xbox acquired since 2018.
All of this comes after recently appointed Xbox boss Asha Sharma — a newcomer to gaming who was previously a Microsoft AI executive — has talked about how the brand isn’t healthy and requires a major “reset.” Ironically, though, she’s also talked about how this year — which actually marks Xbox’s 25th anniversary — will serve as the “return” of the brand. How, exactly, she thinks that will happen amid this total gutting of so much of the company’s talent remains unclear.
Image credit: Xbox
Source: The Verge
