After yesterday’s news that Undead Labs is rumoured to be facing potential closure (and potentially taking State of Decay 3 with it), another Microsoft studio is facing a similar situation in Arkane Lyon, which is currently developing a title based on Marvel’s Blade.

According to a new report by The Verge, which cites sources familiar with the situation surrounding Xbox and Microsoft, the computer giant is reportedly considering closing Arkane Lyon, joining Undead Labs, Compulsion Games, Double Fine and Ninja Theory. However, Microsoft is also considering selling the studio.

Despite that hope for Arkane Lyon, that reportedly doesn’t apply to Marvel’s Blade, which is facing cancellation by Microsoft. The game was announced back in 2023 at The Game Awards, and was supposed to debut later this year. However, the game’s release has now slipped to “late 2027”, and has also ran over its projected budget.

While all the studios involved have been trying to find buyers in order to avoid closure, South of Midnight developer Compulsion Games has already begun telling employees to look for jobs elsewhere. Meanwhile, Ninja Theory, which had its third entry in the Hellblade series announced during Summer Game Fest in Senua, has already told employees that Microsoft wants to close the studio or sell it.

Not much information on Marvel’s Blade was revealed, other than it was a third-person title to be set in a quarantined section of Paris in the middle of a supernatural emergency. Vampires have emerged, terrorizing the city of lights and forcing Parisians to shelter inside their homes at night to wait for sunrise. It’s up to the Daywalker known as Blade to investigate.