Multiple reports say Microsoft is preparing a wave of layoffs affecting Xbox employees and could also lead to studio closures, mergers, or canceled projects. The Verge reports that Microsoft is considering shutting down at least five studios, including Arkane, which is developing Marvel’s Blade. The reports say Blade was initially planned for 2026, later delayed to late 2027, and is described as over budget. Other reporting referenced by GameSpot indicates Blade has not been officially canceled despite not appearing at the Xbox Games Showcase, and that the game has not released gameplay footage since its 2023 announcement.
Alongside potential closures, sources cited by The Verge say Microsoft is exploring options to sell some studios, which could prevent them from closing if buyers are found. The studio work discussed includes the Arkane teams in Lyon, France, and notes that Arkane’s Austin, Texas studio that developed Redfall shut down in May 2024 after Microsoft’s acquisition of the teams through ZeniMax.
The reports also say job cuts are expected to begin around July 6 and could impact most parts of Xbox, with estimates from other outlets suggesting the layoffs could reach around 1,000 positions. The decision is linked to Xbox leadership’s stated plans to “reset” the business.
