Xbox unveiled a major restructuring on July 6, cutting 3,200 jobs worldwide, including 1,600 layoffs announced that day, in what CEO Asha Sharma called "the most significant restructure in Xbox history" due to an "unhealthy" gaming business [1, 2, 3].
Among affected studios, Arkane Lyon in France entered a required consultation process with its Works Council under French labor law to determine its future. Microsoft is weighing options such as selling, closing, or continuing the studio’s operations, but no final decision has been made. Sharma explained, "In France, Arkane’s management is beginning required consultation with its Works Council to review potential strategic options" [1, 4, 2, 3].
Arkane Lyon's status stands in contrast to other studios: Compulsion Games and Double Fine Productions will become independent, while Ninja Theory and Undead Labs have found new owners. Arkane’s future ownership remains uncertain [1, 2]. Raphaël Colantonio, Arkane's co-founder, joked publicly at Sharma, asking "how much? I’m asking for a friend" about buying the studio [1, 3].
The restructuring also impacts Marvel’s Blade, a game developed by Arkane Lyon and announced in December 2023. The project has been internally delayed to late 2027 and is running over budget. Despite this, Microsoft stated no first-party announced games are being canceled, implying Marvel’s Blade remains planned for release [4, 2, 3]. Bethesda head Todd Howard praised Arkane’s work during an early visit in May 2026, saying, "I’m not at liberty to say when [we'll see more], but I saw some stuff just yesterday and the folks at Arkane are doing a really, really great job" [2].
Arkane Austin was closed during prior Xbox cuts in 2024, marking a continuing challenge for the studio’s parent company [4, 3].
The consultation process at Arkane Lyon could take several months under French labor law, delaying a definitive outcome on the studio’s fate [1, 4, 2, 3]. Meanwhile, Xbox continues to execute its broad restructuring and reevaluation of its gaming divisions.
