Microsoft May Close Arkane Lyon, the Studio Behind Dishonored, With Marvel's Blade Almost Done

Just days after EA shut down BioWare, another famous studio is in danger. Microsoft is considering closing Arkane Lyon, the French studio behind Dishonored and Deathloop, which is almost finished with Marvel's Blade. About 217 jobs are on the line, and the clock is ticking toward a November 13 deadline.

Last updated October 25, 2026. This is a developing story.

What's happening

• According to the French newspaper Le Monde, Microsoft told Arkane Lyon staff back in July that it planned to close the studio.
• About 217 jobs are at risk (some reports say around 220).
• French law requires a big company planning to close a site to look for a buyer first. That consultation was scheduled to end on November 13, 2026. Some reports say it has been extended by a month, but no new date has been confirmed.
• If it goes ahead, the closure could start at the end of 2026 and continue into early 2027.

What about Marvel's Blade?

This is the painful part. Marvel's Blade was revealed at The Game Awards in 2023, and fans have been waiting for it ever since. According to a union representative quoted by Le Monde, the game is "nearing the end" of production.

Microsoft hasn't cancelled it. Instead, it says it's "actively seeking a partner to support the next phase of development and enable the commercialization" of the game. In plain English: Microsoft doesn't want to pay to finish and release it alone, and is looking for someone else to help.

What Microsoft says

Microsoft told Le Monde it continues to explore options for the studio as part of the French consultation process. It stressed that the closure documents are part of a mandatory legal process and not a final decision. But it hasn't named any buyer or partner yet.

Is there hope?

Maybe. Bloomberg's Jason Schreier, one of the most trusted reporters in the games industry, wrote that there are "multiple paths actively being explored that would save Arkane Lyon," and that he'd be surprised if the studio is shut down. He also pointed out that closing a studio in France is very expensive because of French labour rules on severance, which gives Microsoft a strong reason to find another solution.

Who is Arkane Lyon?

Arkane is one of the most respected studios in gaming. Its games include:

• Dishonored (2012) and Dishonored 2 (2016), stealth classics loved for their freedom and level design
• Deathloop (2021), a stylish time-loop shooter

Microsoft got Arkane when it bought Bethesda in 2021. It already closed Arkane's other studio, Arkane Austin, in 2024 after the poorly received Redfall. Losing Lyon too would mean the end of Arkane as fans know it.

A brutal week for game studios

This news comes right after EA closed BioWare and cancelled the next Mass Effect. Two of the most famous RPG and immersive-sim studios in the world are in trouble in the same week, and both owned by giant publishers. It's hard not to see a pattern: big companies cutting costs, and creative studios paying the price.

My take

Closing the studio that made Dishonored, while its game is almost done, would be one of the worst decisions Microsoft could make. Fans have waited years for Blade, and the people who built it deserve to see it released. I hope Schreier is right and a partner steps in before November 13. I'll update this article as soon as there's news.