Marvel’s Blade and its developer Arkane Studios are reportedly among the biggest casualties of Xbox’s ongoing restructuring, with new reports claiming Microsoft is considering both canceling the game and closing or selling the studio behind it.

The latest claims arrive as Xbox prepares for what insiders have described as the largest wave of layoffs in the company’s history.

Marvel’s Blade Reportedly at Risk

According to The Verge’s Tom Warren, Microsoft is actively considering canceling Marvel’s Blade as part of broader cost-cutting measures across Xbox Game Studios.

Warren reports that sources familiar with the matter claim Xbox is reviewing several first-party projects and studios, with Blade now among those whose future is uncertain.

The report states:

“Microsoft is currently weighing closing at least five studios, including the developers behind Marvel’s Blade.”

If accurate, it would represent one of the biggest cancellations in Xbox’s current first-party lineup.

Insider Reports Raised Concerns Earlier

The latest report follows earlier information indicating that Arkane Studios had already been under internal review.

According to previous reporting, Microsoft was reportedly dissatisfied with the pace of development on Marvel’s Blade and had begun evaluating “all options” regarding both the project and the studio itself.

While Microsoft has not publicly commented on Blade’s status, multiple reports now suggest the game’s future is far from secure.

Arkane Could Be Sold Instead of Closed

Rather than shutting the studio outright, Microsoft is also reportedly exploring the possibility of selling Arkane Studios.

According to The Verge, Arkane joins several other Xbox-owned developers that are allegedly being evaluated for either:

• Sale to another publisher
• Spin-off as an independent studio
• Full closure

Studios reportedly under review include:

• Arkane Studios
• Double Fine Productions
• Ninja Theory
• Compulsion Games
• Undead Labs

None of these claims have been officially confirmed by Microsoft.

Xbox Layoffs Expected to Impact Hundreds

The reports come amid what has been described as a major restructuring across Microsoft’s gaming division.

Industry insiders expect layoffs to affect numerous Xbox teams, with estimates suggesting up to 1,000 employees could lose their jobs.

If those numbers prove accurate, it would become the largest workforce reduction in Xbox’s 25-year history.

Some employees have already begun updating LinkedIn profiles and publicly indicating they are searching for new opportunities ahead of any official announcements.

Microsoft Has Yet to Respond

At the time of writing, Microsoft has not confirmed:

• The cancellation of Marvel’s Blade
• Any planned studio closures
• Potential sales of first-party developers
• The scale of upcoming layoffs

Until an official announcement is made, all reports regarding Arkane Studios and Marvel’s Blade should be treated as unconfirmed.

However, with multiple reputable outlets now reporting similar information, the coming days could prove pivotal for Xbox’s first-party future.