At least three companies have now put bids on the table for Arkane Lyon, and Microsoft has accepted none of them. According to a new Bloomberg report, Ubisoft is among the suitors trying to purchase the Dishonored studio — and the developer of the upcoming Marvel’s Blade — from Xbox, with roughly 217 jobs riding on which offer, if any, wins out.
The report, from Bloomberg’s Jason Schreier, names Ubisoft as the only bidder willing to be identified. Two other gaming companies have also approached Microsoft, while the Xbox owner is said to be weighing a management buyout that would spin the Lyon team out as an independent studio — the same arrangement Undead Labs secured earlier this year.
Who Is Bidding for Arkane Lyon?
Ubisoft makes a certain geographic sense. The Assassin’s Creed publisher is headquartered in France, has extensive local infrastructure, and could absorb the Lyon-based team without relocating anyone. It has also been busy close to home: the studio recently shipped Black Flag Resynced, its remake of the pirate-themed Assassin’s Creed entry.
The identities of the other two bidders remain unknown, and no party — Microsoft, Xbox, Arkane or Ubisoft — has commented publicly. Terms of any potential deal have not been disclosed, and Bloomberg reports that Microsoft has yet to pick a preferred buyer. What is clear is that the company is more inclined to sell than to shut: the outlet describes a deal as more likely than closure.
The Deadline Written Into French Law
The ticking clock is unusual by industry standards. French labour law requires companies of Microsoft’s size to search for a buyer before closing a site, so Arkane Lyon entered a formal consultation process when Microsoft announced plans to divest the studio as part of its July “reset”. The process originally ran to a mid-November deadline before being extended by another month, and an Xbox spokesperson has confirmed the company is exploring options ahead of a December cut-off.
French newspaper Le Monde reported in October that Microsoft wanted to close the studio outright, putting those 217 positions at risk. The consultation requirement is the reason a bidding war exists at all — a protection US-based studios never enjoyed when Xbox reshaped its first-party lineup around titles like The Elder Scrolls 6.
“A deal would allow Arkane Lyon to complete its current project, Marvel’s Blade, which is expected to be released within the next year or two.” — Bloomberg
What a Sale Means for Marvel’s Blade
For players, the prize is Marvel’s Blade — a single-player action game following the Daywalker as he hunts vampires through France, built in Arkane’s signature immersive-sim style. It was revealed at The Game Awards in December 2023 and has been all but silent since, with no release date or platforms announced.
Any sale would let development continue to completion, and leaving Microsoft’s orbit could change where it lands. Xbox has committed to a renewed focus on console exclusives, but a Ubisoft-owned (or independent) Arkane would be under no such obligation — which puts a PS5 version firmly back in the cards. A closure, by contrast, would kill the project entirely.
Key point: French labour law forces Microsoft to find a buyer for Arkane Lyon before it can close the studio — the consultation deadline now runs into December.
Xbox’s Reset, Studio by Studio
Arkane Lyon would be the latest piece of Microsoft’s July restructuring to find a new home rather than the scrapheap. Four studios have already been spun out: Double Fine and Compulsion Games have both gone independent, Undead Labs went independent with a publishing deal for State of Decay 3, and Ninja Theory faces possible closure after two acquisition deals fell through.
The studio’s two branches have had sharply different fortunes. Arkane Austin — developer of Prey, the original Dishonored and the ill-fated Redfall, which IGN scored 4 out of 10 — was closed in 2024. Arkane Lyon, responsible for Dishonored 2 and the 10-out-of-10 Deathloop, joined Xbox through the ZeniMax Media acquisition in 2021 and has spent the autumn fighting for survival.
With bids on the table and a legal process forcing Microsoft’s hand, the coming weeks should settle the question. If Bloomberg’s read is right, the Dishonored studio lives on — and Blade ships within a year or two of the ink drying.
