As beloved Dishonored studio faces closure, Xbox agrees union request to extend negotiations deadline in hope of saving 217 jobs

Arkane Lyon, the acclaimed developer behind Dishonored and Deathloop, has been granted additional time to find a new owner after Microsoft announced plans to close the studio in July as part of a sweeping organizational reset. The studio’s 217 employees face potential job loss unless a buyer is found.

Under France’s strict labor laws, Microsoft was legally required to conduct a three-month consultation period before proceeding with closure. The original deadline of November 13, 2026, has now been extended by one month to December 13. Microsoft confirmed that it has ’extended the consultation period by one additional month as we explore options, including finding a partner to support the studio through the development work still ahead.'

Arkane Lyon is currently in development on Marvel’s Blade, a title that remains in active production despite the studio’s uncertain future. The extension and exploration of partnership options suggest Microsoft is committed to ensuring the game reaches completion, either under new ownership or through external support arrangements.

The Arkane situation is part of Microsoft’s larger restructuring effort announced in summer 2026, which will result in 3,200 job losses across its gaming division. While some studios like Double Fine, Compulsion Games, and Undead Labs have managed to regain independence, and Ninja Theory faces outright closure, Arkane appears to be receiving a lifeline as Microsoft seeks solutions to preserve the studio.

As beloved Dishonored studio faces closure, Xbox agrees union request to extend negotiations deadline in hope of saving 217 jobs

Sources