Arkane Studios, developer of Dishonored, Deathloop and Marvel’s Blade, is facing closure, as Microsoft reportedly look to make significant cuts at Xbox.

Several Xbox studios are already on the cutting block, with Compulsion Games, Double Fine, Ninja Theory and Undead Labs all facing potential closure.

Fast forward to today, and a report by The Verge’s Tom Warren claims that Arkane Studios could be shuttered if a buyer isn’t found.

“Sources tell me Microsoft wants to cancel Blade as part of a wave of cost cuts and job losses that are planned for the company’s Xbox gaming division,” the report said.

Warren’s report revealed that Blade has been internally delayed to 2027, having originally been set for release this year. Development on Blade is also reportedly over budget, which may be a contributing factor to the studio’s potential closure or sale.

“Blade was originally supposed to debut later this year, according to sources familiar with the game’s development. I’m told the internal ship date for the game slipped to late 2027, and it’s also running over budget.”

It’s expected that the true extent of Microsoft’s layoffs will be made public next week, with closures, cancellations, spinoffs and mergers all currently on the table.

Announced during The Game Awards in 2023, Blade is described as a “mature, single-player, third-person game set in the heart of Paris”, with players stepping into the boots of the legendary half-man, half-vampire daywalker Eric Brooks.

The last game that Arkane shipped was 2021’s Deathloop, which received a strong critical reception, scoring 88 on Metacritic.

In our review, we described Deathloop as “a confident shooter infused with both the studio’s signature DNA and a level of 60’s panache that Austin Powers would be proud of.”