Marvel's Blade delayed to late 2027 and over budget as Microsoft weighs closing or selling Arkane Lyon

Microsoft is considering closing or selling Arkane Lyon, the French studio behind Marvel's Blade, as part of the largest restructure in Xbox history. The Verge reported that Blade was internally delayed from a 2026 target to late 2027 and is running over budget — and IGN confirmed that reporting is accurate. The game was a no-show at the Xbox Games Showcase in June, which first set off alarm bells in the community.

Because Arkane Lyon is based in France, Microsoft cannot simply shut it down — the studio has entered required consultation with its local Works Council to review potential strategic options, a process that could take months. No buyers have been named publicly. Microsoft's official statement says no publicly announced first-party games are being canceled in this reset, but if Arkane Lyon is sold or closed, the fate of Blade — and any role Disney and Marvel would play in those negotiations — remains genuinely open. Blade was announced at The Game Awards in December 2023 with a CG reveal trailer; no gameplay footage has ever been shown. Game director Dinga Bakaba confirmed on stage it's a third-person action-adventure set in Paris. Arkane co-founder Raphael Colantonio, who no longer works at the studio, responded to Xbox CEO Asha Sharma's post with a tongue-in-cheek offer: "Regarding Arkane... how much? I'm asking for a friend."

The broader Xbox restructure is massive. Sharma announced 3,200 job cuts across the current financial year, with 1,600 happening on July 6 alone — roughly one-fifth of Xbox's total workforce. Compulsion Games and Double Fine are going independent, taking their IP and catalogs with them, though Microsoft retains the Psychonauts IP. Ninja Theory and Undead Labs have entered terms with new, unnamed owners to complete Senua and State of Decay 3 respectively. Arkane Lyon is the one studio whose fate is still formally undecided. The timing is particularly jarring given that Bethesda's Todd Howard said on May 21 he had just seen Arkane Lyon's work on Blade and was "really, really" impressed, adding he wasn't at liberty to say when more would be shown.

The community reaction has been a mix of grief and dark humor — Colantonio's tweet went viral almost immediately. With layoffs already underway and the consultation process just beginning, any resolution for Arkane Lyon is likely still months away.