Microsoft mulls selling Arkane Studios and scaling back the Blade game

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Microsoft has been extremely busy lately, taking a well-earned break from polluting the world with AI to eviscerate the videogame industry . The reports of potential layoffs and closures—coupled with the short-sighted strategies of other publishers, including main rival Sony—are devastating. And the bad news just keeps coming.

According to The Verge , Arkane's Blade is now on the chopping block as well. This wasn't entirely unexpected, granted. While Arkane's games tend to be critically acclaimed, immersive sims continue to be a hard sell. Dishonored 2 and Prey didn't meet Bethesda's sales expectations, and Redfall was just a complete mess.

Now, a vampire-hunting dhampir stalking the streets of Paris sounds like a pretty good setup for an Arkane romp, but while Blade is highly anticipated, we've heard so little about it since the reveal that there have been concerns that development isn't going smoothly.

Todd Howard recently attempted to put these concerns to rest only last week, saying Arkane was " doing a really, really good job" on Blade . This vote of confidence, coupled with Arkane art director Jean-Luc Monnet saying the game wasn't being cancelled and that fans need to let Arkane cook, seemed like good news.

But Todd Howard ain't in charge now—he might have confidence in Arkane, but that doesn't mean Microsoft and Xbox's leadership feel the same way.

The Verge reports that Arkane is one of at least five studios being considered for closure as part of a cost-cutting strategy. Blade was meant to arrive this year, the report says, but the unannounced release date has since moved to late 2027. Coupled with it running over budget, this has given Xbox the fear.

Arkane's death would be tragic—the immersive sim genre is not a large one, and Arkane's one of the few major studios still making this type of game. Arkane's also been around for a whopping 26 years. It's got an important legacy.

However! There might be light at the end of the tunnel. Microsoft is apparently considering selling Arkane off, a move that would salvage the studio—and hopefully the talent. Though the latter is far from guaranteed. Still, Arkane escaping Xbox might actually be a good thing. Bethesda really didn't get Arkane, and Xbox hasn't shown much more understanding. This is a studio that likes to take risks, working for a publisher that's terrified of them.

Certainly, things aren't going to improve at Xbox. AI-loving CEO Asha Sharma's big Xbox reset will gut Microsoft's gaming division, with at least 1,000 jobs rumoured to be at risk, and that's not including the layoffs due the reportedly impending studio closures.

Basically: Xbox is digging its grave, but there's still hope for Arkane.

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