The Verge: Microsoft weighing Arkane Studios closure, Marvel’s Blade cancelation

Xbox plans to announce a wave of layoffs leading to studio closures, spinoffs, potential mergers, and canceled games next week, according to a The Verge report citing sources familiar with Xbox parent company Microsoft’s plans.

Microsoft is reportedly weighing the closure of at least five studios, including Marvel’s Blade developer Arkane Studios, which operates under the Bethesda Softworks banner. However, the company is also exploring options to sell the studio. Microsoft also wants to cancel Marvel’s Blade, the report claims. The game was originally planned to launch later in 2026, but slipped to late 2027 and is running over budget.

As reported by Bloomberg last week, Microsoft is also said to be trying to spin off Compulsion Games, Double Fine Productions, and Ninja Theory. GamesBeat also reported this week that Microsoft is seeking a buyer for State of Decay 3 developer Undead Labs.

Compulsion Games is reportedly already convinced the studio will close and has begun telling employees to seek work elsewhere. Ninja Theory employees were also informed earlier this month that Microsoft wants to close or spin off the studio.

The wave of layoffs—planned to begin on July 6, according to The Verge’s sources—could result in at least 1,000 job losses if Microsoft closes studios, or at least 500 before the wider cuts.