Rumored: Dishonored and Blade Developer May Be Cut from Xbox Lineup

As Xbox braces for significant layoffs that could lead to the closure or restructuring of several studios, a new report highlights Arkane Studios, known for the Dishonored series, as one of the teams facing uncertainty while it develops Marvel’s Blade.

According to a recent report, Xbox is considering canceling Blade entirely after the game’s internal release date was pushed from this year to next due to budget overruns. With Blade potentially off the table, Xbox is exploring options to divest Arkane Studios. The company is reportedly evaluating various strategies to streamline its roster, which may include studios like Double Fine, Ninja Theory, and Compulsion Games. Leadership within these studios is actively seeking ways to maintain their teams amid these changes.

If Arkane were to close or be sold, it would particularly affect Arkane Lyon, especially after the recent shutdown of Arkane Austin following the launch of Redfall in 2024.

So far, Xbox has not publicly addressed its plans beyond an email sent to employees earlier this month, which outlined the division’s financial challenges. In that communication, CEO Asha Sharma and Xbox Game Studios head Matt Booty described the studio system as “overextended” and “not adequately funded.”

In the meantime, as part of a broader initiative to cut costs, Xbox is already severing ties with third-party contractors and vendors, leading to additional job losses. This includes the cancellation of external projects like Project Fantasy at IOI Interactive, which is also facing layoffs as a result.