Arkane Lyon May Avoid Closure As Takeover Talks Begin For Marvel's Blade

The past couple of weeks have been brutal for the games industry, and the news has moved so quickly that plenty of planned coverage keeps getting bumped. Still, here's some encouraging news. Arkane Lyon, the French studio many people had already written off as the next closure, may have a way out.

For many players, this team matters personally. If you grew up on first-person shooters, Dishonored is the sort of game that can change what you expect from the genre. It drew many people into immersive sims by making the world feel touchable.

Dishonored came from Arkane Lyon, which differs from the Austin team behind Prey.

Bethesda's open worlds borrowed some of those ideas, letting you look at an object, pick it up, and drop it into your inventory, and that small detail makes a setting feel like a real place rather than decoration. Dishonored went further by letting your creativity be the limit.

One famous example is possessing a fish and swimming through the pipes to slip unseen into an exclusive building. The choices and consequences give it huge replay value. The sequel is a masterpiece in its own right, and both games came from Arkane Lyon.

It helps to separate the two Arkane teams, since people tend to lump them together. The Austin team made Prey, and after most of its members left, the remaining staff produced Redfall. That group is long gone, and one of its former leads has since started a new studio.

Arkane Lyon is the studio behind Dishonored and its most recent release, Deathloop. In 2023, Blade, a Marvel game, was announced for XBOX, PlayStation, and PC, though it wasn’t first presented that way. It started when word spread that the studio's French management began a required consultation with its works council to review strategic options.

Many people assumed that meant a delayed shutdown, with the rest of the company spinning off to do other things while this team took the loss.

A French newspaper has since reported more detail. XBOX announced plans in July to divest the studio, and the consultation on its proposed closure runs to a November 13th deadline, with several takeover options under discussion. That date is Arkane Lyon's deadline to find a buyer. The studio's sole union representative says it's considering multiple takeover options while Microsoft looks for a partner.

The search for a buyer began in mid-summer under France's Florange law, which requires companies with at least 1,000 employees to seek a buyer before certain closures involving large-scale layoffs. November 13 also marks the end of consultations with the studio's Social and Economic Committee, and roughly 217 jobs are at risk.

These details come from the newspaper's reporting and union statements, not directly from the studio. Microsoft separately told the publication it is actively seeking a partner to support the next phase of development and commercialize the Marvel project.

This sounds a lot like what happened with Undead Labs, where the message was that a future exists as long as the right partner turns up. For Arkane Lyon, the search is harder, because it is working on what is essentially an immersive sim, and that is a tough sell at big-budget scale. It isn't fair to call the genre dead.

Finding a buyer is harder because immersive sims are a tough sell at scale.

It has mostly bled into other kinds of games, much like role-playing games did in the early 2010s, when open worlds picked up skill trees and leveling but lost the depth that made the genre special. RPGs faded for a while, then came back strong in the 2020s, and immersive sims seem to be on the same road back.

Still, a genre hardcore fans love but the wider audience doesn't always chase becomes risky when tied to a Marvel license, since it adds real financial pressure. Anyone who followed the Wolverine game knows the story. What stands out most is how close the game is to being done.

The union representative told the newspaper that Marvel's Blade is nearing the end of production and that leaving it unreleased would be a monumental waste. The French video game workers union said it is proud of the work completed and believes the game would succeed if it ships.

That makes it hard to see why XBOX hasn't decided to stick it out, since, going by what people are speculating, keeping Arkane Lyon afloat long enough to ship could end up cheaper than walking away. Being close to finished doesn't guarantee a good game, though, and that is the same point that came up around BioWare and the Mass Effect universe.

Bringing Mass Effect back is a good idea.

However, after several disappointing recent BioWare releases, there wasn't a canceled project there that clearly deserved a rescue. Details about canceled games are always presented in a way that leaves room for imagination, and execution is a separate matter. Dragon Age: The Veilguard started out as Dreadwolf, and its early plot details sounded just as ideal as the new Mass Effect does now.

It comes down to execution and talent. On that front, Arkane Lyon has a strong record. Deathloop is arguably its weakest game, and even calling it the worst feels harsh. It offered gameplay freedom, but it also marketed itself as having narrative freedom, and the story ended up feeling quite funneled.

Even so, the stealth felt great, the style was strong, the interactivity was there, and the level design was interesting. If that is the low point, the Marvel project looks like a solid bounce-back, and the license could even act as a springboard. Its signature series did well until it didn't; Prey never really got its time in the spotlight, and Deathloop sold well enough that a sequel seemed likely.

Picking a familiar character may have been a way to bring more people into the genre, though Marvel's Blade is a cursed character in entertainment, with the movie recently canceled. If the game is as close as claimed, that likely points to a release next year, and at that stage XBOX can't afford to pinch pennies this hard.

Missed deadlines and a two-year wait would be a different story, but a finish line near the end of next year is worth seeing through.

The same goes for State of Decay 3, where letting Undead Labs go was the wrong call, since the game was close to release and should do well. An arrangement like the one Undead Labs got could work here, with the game arriving on Game Pass from day one, if Game Pass still works that way by then.

An industry insider added encouragement, saying that despite the gloomy headlines, multiple paths are being actively explored to save Arkane Lyon, and that they would be surprised if it shut down. That comment came on the day BioWare's closure surfaced. It is a bold claim in an industry where shutdowns feel routine, though the company seems to be working to avoid the PR hit of acting as an executioner.

If Arkane Lyon survives, the only loss would be Ninja Theory, which people have mixed feelings about. Compared with EA's approach of discarding legacy teams, fewer closures is the better outcome. The same insider pointed out that shutting down a studio is expensive, and doing it in France means an extended severance period under local labor laws. Microsoft doesn't want to take on those costs.

The founder of WolfEye, who also worked at the studio for a while, asked online a few months ago what it would cost, and he later had lunch with a former colleague. It isn't clear whether he can step in, since nobody knows how much money WolfEye has or what kind of deal could work. It is surprising to see such a fight over a licensed immersive sim from a proven developer, though French studios can be expensive to maintain depending on location.

Mid-November, right before GTA launches, will bring answers. If Arkane Lyon survives, players still need to show up for its next game, whether that ends up being a Deathloop follow-up or the vampire hunter, which brings the focus back to day-one Game Pass.