And obviously the Blade game might get canceled.

Arkane Studios joins four other XBOX owned studios that are being put on the chopping block. According to "sources familiar with Microsoft's plans" talking to The Verge, Microsoft is "currently weighing closing at least five studios, including the developers behind Marvel's Blade."

Those sources tell The Verge that Microsoft has plans to cancel Blade as part of their monumental cost cutting measures that are coming shortly for XBOX. These cost cutting measures don't just include canceled titles but the potential closure or sale of at least five XBOX owned studios and countless layoffs.

Blade was originally expected to have a late 2026 release. According to The Verge's sources, the game has suffered internal delays that has pushed it into a late 2027 release window. The game is also allegedly running over budget.

Microsoft is already considering canceling Blade completely while also "exploring options to sell Arkane Studios." If true, Arkane joins other XBOX owned studios that may be shuttered if an outside buyer is not found in time. Other XBOX owned studios at risk of closure include Compulsion Games, Double Fine, and Ninja Theory. This week, GamesBeat says that Microsoft is also looking for a buyer for Undead Labs, the studio behind the State of Decay series and the (hopefully) upcoming State of Decay 3.

It could potentially take months to find buyers and finalize the sale of these studios should potential buyers be found. If no buyers are found, the studios will be closed, projects canceled, and all employees laid off. Even if buyers are found, layoffs are almost guaranteed to take place.

Layoffs across all of XBOX and XBOX owned studios are expected to happen. Most expect the layoffs to start on July 6th. Some rumors suggest that there will be at least 1,000 people laid off from across XBOX, which may not even take into account the roughly 500 or so employees that will be impacted from the possible closure of Compulsion, Double Fine, Ninja Theory, Undead Labs, and Arkane.

A "fun" fact to keep in the back of your mind when this shit starts to hit the fan next week is the fact that in fiscal year 2025 alone, Microsoft committed about $80 billion towards AI-related projects, which is an increase from the $55 billion they spent on AI in fiscal year 2024. In 2025, they allocated about $42 billion on the development of US data centers for AI, another $20 billion on international data centers, and about $12 billion on AI-focused hardware and networking which includes mass purchases of Nvidia H100/B200 GPU clusters.

For 2026, Microsoft is spending $190 billion on AI.

Now you keep those numbers in the back of your mind when you read about how Microsoft lays off hundreds or even thousands of employees and shutters entire studios in the coming weeks in order to "cut costs."