Arkane Lyon Faces Closure as Microsoft Moves to Cut 217 Jobs

October 25, 2026 - 16:12

Arkane Lyon, the studio behind Deathloop and the upcoming Marvel's Blade, is facing closure under a plan announced by Microsoft. The move puts 217 jobs at risk and has triggered a formal consultation process with the studio's works council, which is currently due to end on November 13.

The decision marks a significant blow to the French development scene. Arkane Lyon, based in the city of Lyon, has built a reputation for immersive sim design and distinctive art direction over nearly two decades. Its closure would follow a broader pattern of consolidation and cutbacks across Microsoft's gaming division, which has seen several studios affected since the company completed its acquisition of Activision Blizzard.

Employees were informed of the plan ahead of the consultation period. Under French labor law, the works council process gives staff representatives a formal role in reviewing the proposed redundancies and negotiating the terms of any departures. The November 13 deadline leaves a window for discussions, though the company's intention to close the studio has already been set out.

For the workers involved, the coming weeks will focus on severance terms, redeployment options, and the future of projects currently in development. Marvel's Blade, announced in 2023, had been positioned as one of the studio's most ambitious titles. Its fate, along with the studio's other ongoing work, remains uncertain as the consultation proceeds.

The closure would leave a notable gap in France's game development landscape and add to concerns about job security across the wider industry, where layoffs have continued through the year at major publishers and independent studios alike.