Dishonored studio Arkane Lyon has until November 13 to avoid closure, Le Monde reports

Microsoft wants to shut down Arkane Lyon, the French studio behind Dishonored 2 and Deathloop, unless a buyer or new funding that would keep it open turns up by November 13. Le Monde broke the story on October 23, as Push Square and Pure Xbox report. Around 217 jobs are on the line, and so is Marvel's Blade, the action game the studio has been making since it was announced in 2023.

Microsoft hasn't confirmed a closure. In its statement to Le Monde, as translated by Pure Xbox, the company says it is still weighing options for Arkane as part of the consultation French law requires, and that it is looking for a partner to back the next phase of development. A studio source quoted by the paper put it more bluntly: the team are "collateral victims of Xbox's change in strategy."

Not the Arkane that made Redfall

Arkane used to have two studios. Microsoft closed the Austin, Texas, team that made Redfall in 2024, as PC Gamer notes. Lyon is the original studio and the only one left. It made Dishonored 2 in 2016 and Deathloop in 2021, and it became part of Microsoft that same year through the purchase of Bethesda's parent company, ZeniMax.

Why it survived the July cuts

In July, Xbox announced 3,200 job cuts over a year and said four studios would leave the company: Compulsion Games, Ninja Theory, Double Fine and Undead Labs. Arkane wasn't on that list because French companies can't close a site overnight. They first have to consult the works council, the body that represents employees, and according to Le Monde they must spend at least three months looking for a buyer. That search started over the summer, and the paper puts the consultation deadline at November 13.

That date may slip. In September, Xbox said talks with Arkane would run until the end of the year, and Pure Xbox suggests negotiations could stretch into the first quarter of 2027.

Where this leaves Marvel's Blade

Blade is a mature-rated, third-person action adventure set in Paris, and nobody outside the studio has seen it played yet. In June, The Verge reported that Microsoft had pushed its internal release target from 2026 to 2027 and that the game was over budget, according to Game Informer. Union representatives now tell Le Monde that development is nearly finished.

Microsoft's statement doesn't name the game when it talks about finding a partner, but Pure Xbox reads it as a reference to Blade, the studio's only known project. None of the reports say whether a buyer would take the game too, since it is built around a licensed Marvel character.

Sale, partner or shutdown

Based on what has been reported, there are three ways this can end. Someone buys the studio, a partner pays to finish Blade, or Microsoft closes Arkane Lyon once the consultation is over. Bloomberg reporter Jason Schreier wrote after the story broke that several paths to save the studio are being explored and that he would be surprised if it closed, while warning that anything can happen in a negotiation.

The deadline lands in the middle of a wider round of cuts. Xbox has already eliminated 1,868 of those 3,200 roles and plans more layoffs in November and January, according to the Fortune report we covered in our story on its à la carte Game Pass plans. On October 21, EA also shut down BioWare and canceled the next Mass Effect.