Arkane Lyon Wins Consultation Extension in Microsoft Reprieve

Microsoft has extended the consultation over the proposed closure of Arkane Lyon by an additional month, giving the French studio behind Dishonored and Deathloop more time to find a buyer and keeping its Marvel's Blade project alive. The consultation extension, reported on October 23, pushes the process past a mid-November deadline that had put 217 jobs at risk, according to Le Monde.

A Microsoft representative told PC Gamer that the company had extended the consultation period as it explores options, including finding a partner to support the studio through the development work still ahead. The company also said the July documents describing a possible closure are part of the required consultation process and do not represent a final decision. No buyer has been named, and no revised end date has been published.

How the deadline moved

Arkane management told employees on July 16 that Microsoft intended to close the Lyon studio, ten days after Xbox announced a restructuring that cut thousands of jobs across its gaming business. A method agreement signed on July 24 by Arkane Studios SAS and its sole representative union, Printemps Ecologique, describes a plan to end all company activity and dismiss staff for economic reasons. The agreement was published on August 10 and opens a works council consultation on finding a buyer for all or part of the business so jobs can be saved.

Under France's Florange Law, companies with more than 1,000 employees that plan to close a site must first seek a buyer. The buyer search began in the summer, with ZEMPHI Partners appointed to assist, and the original deadline for the consultation was November 13. Negotiations over the redundancy plan are scheduled to continue through October 30. A union delegate identified only as Simon told Le Monde that negotiations over the employee protection plan were "going badly" and that Microsoft was not giving representatives a choice. The unions are pushing for affected staff to be re-employed at other Xbox studios and have not ruled out taking Microsoft to court.

Bloomberg reporter Jason Schreier, known for his reporting on the games industry, said he would be surprised if the studio shut down, adding that multiple paths to save Arkane Lyon were actively being explored. An internal document seen by Le Monde schedules a complete wind-down of the studio's activities from the end of this year into early next year if closure proceeds, but that schedule exists alongside the search for a partner, not instead of it.

What happens to Marvel's Blade

Marvel's Blade was announced at The Game Awards in 2023 and has no release date. The union representative told Le Monde the game is nearing the end of production and that cancelling it now would be a "monumental waste". Microsoft has said it is actively seeking a partner to support the next phase of development and enable the game's commercialization, but its statement stops short of committing to release the game or to fund the studio itself. Several takeover options are reportedly under consideration, though confidentiality limits what union representatives can disclose.

The stakes are clear in the studio's recent history. Two weeks before the July announcement, Bethesda executive producer Todd Howard said in an interview that the Lyon team was doing a "really, really great job" on the game. Arkane Lyon assured fans in June that Marvel's Blade was still in development after rumours suggested it had been shelved, and Microsoft said in July that none of its announced Xbox games had been publicly cancelled as part of the restructuring. Whether that holds for Blade now depends on a sale.

There is also a commercial timetable behind the talks. According to IGN, development on Marvel's Blade was still on track for a new reveal early next year, followed by a release in the final quarter of that year. That schedule is now tied to the buyer search: without a partner to fund the remaining work, the reveal and release dates would be in doubt, a point also noted in GameSpot's coverage of the deadline. If no buyer is found, the French Social and Economic Committee is the next stage before any final decision on the studio's future.

A wider Xbox shake-up

Arkane Lyon is one of several studios caught in Xbox's July restructuring, which affected more than 3,200 jobs. Compulsion Games, Double Fine Productions and Undead Labs went independent, while Ninja Theory faces closure after attempts to find outside investors fell through. The pattern extends beyond Microsoft: EA shut BioWare and cancelled the next Mass Effect game earlier this month, a story covered in this earlier report.

For now, the extra month gives the Lyon studio something it did not have a week ago: time. The works council stays informed throughout, according to Microsoft, and the unions keep pressing for more room to negotiate. The next concrete markers are the end of redundancy negotiations and whatever buyer or partner emerges from the extended search. More detail on the original report is available from Gematsu and Insider Gaming, both reporting on Le Monde's coverage. Readers following the Tech & Games beat can find more coverage on the Tech & Games topic page.