Xbox May Cancel Marvel’s Blade And Shut Down Arkane Studios For Good

Xbox has spent the better part of this year trying to convince fans that its internal shakeup was a step toward stability rather than another chapter of chaos. New CEO Asha Sharma took over with promises of a “reset” for the brand, but the last several months have instead brought a steady drip of studio closures, price hikes, and canceled projects that have left the Xbox faithful bracing for the worst.

Arkane Studios, the acclaimed team behind ‘Dishonored’ and ‘Deathloop’, became part of the Xbox family when Microsoft acquired Bethesda parent company ZeniMax Media in 2021. Its sister studio Arkane Austin, known for ‘Prey’, was shut down in 2024 after the disastrous launch of ‘Redfall’, a loss still felt by fans who consider Arkane one of the most talented teams under the Xbox umbrella.

Now that history looks like it could repeat itself. According to entertainment account Culture Crave, citing a report from The Verge, Xbox is reportedly considering canceling Marvel’s Blade entirely and shuttering Arkane as part of a broader wave of studio closures. The report also notes Microsoft is weighing whether to sell the studio off instead of closing it outright, and that the long awaited game has fallen over budget with its release quietly slipping to late 2027.

Arkane is far from alone in this reported purge. Additional reporting indicates Compulsion Games, Double Fine, Ninja Theory, and Undead Labs are all having their futures weighed at the same time, which would bring the total number of at risk studios to five. If Microsoft moves forward with all five closures, hundreds of jobs could be lost before the wider layoffs even begin.

Those broader cuts are reportedly set to start on July 6, with insiders suggesting the total number of job losses across the Xbox division could climb past 1,000. It would mark one of the largest single rounds of layoffs in the company’s history, following a memo from Sharma and chief content officer Matt Booty warning employees that Xbox had become overextended.

‘Blade’ has had a rocky road even before this latest scare. The game was unveiled as a surprise reveal at The Game Awards in 2023, but fans have seen almost nothing since, with the project skipping both the Xbox Games Showcase and Summer Game Fest this year. That silence had already fueled cancellation rumors earlier this year, rumors Arkane brushed off at the time, only for this new report to suggest the threat was very real after all.

The character himself has had a difficult stretch across media. Wesley Snipes’ film trilogy wrapped up long ago, and Marvel Studios’ attempt to reboot ‘Blade’ for the MCU has remained stuck in development limbo for years. A canceled game would mean yet another false start for one of Marvel’s most cinematic characters, who has otherwise only found success as a supporting figure in titles like ‘Marvel’s Midnight Suns’ and ‘Marvel Rivals’.

For now, nothing is finalized, and Microsoft could still find a buyer willing to keep Arkane and ‘Blade’ alive under new ownership. Do you think Xbox should find a way to save Arkane and ‘Blade’, or has the studio’s fate already been sealed by years of silence and setbacks?