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Microsoft Plans to Close at Least Five Xbox Studios, Cancel Marvel's Blade in Sweeping Layoff Round

7/1/2026

Microsoft is weighing the closure of at least five Xbox game studios — including Arkane Studios, the France-based developer behind the forthcoming Marvel's Blade — as part of a wave of cost cuts and job losses planned for its Xbox gaming division, according to The Verge, which cited sources familiar with the company's plans.

An announcement is expected next week. Scope of the Cuts The restructuring, as described to The Verge, goes beyond headcount reduction.

Sources indicate the coming actions will result in studio closures or spinoffs, potential mergers between studios, and the cancellation of games in development.

The breadth of the moves signals a structural recalibration of Microsoft's gaming unit rather than a routine staffing adjustment.

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