Xbox Reportedly Considers Cutting Blade and Closing Arkane Studios

Xbox’s current situation is looking increasingly unstable, with multiple reports suggesting the company is preparing for major studio cuts while also reconsidering projects it previously highlighted. The latest concern centers on Arkane and its upcoming Blade, which is reportedly on the list for possible cancellation as part of broader “cost cuts and job losses.”

Xbox reportedly targets Arkane’s Blade for cancellation

New reporting claims Xbox may be looking at Blade for cancellation, framing it as part of a wider “wave of cost cuts and job losses.” The same report alleges Blade was originally planned for a 2026 release, before slipping to late 2027. It also states the project has run over budget, which is being cited as a key reason the game could be cut.

While the company’s internal direction appears to be tightening fast, it’s also being described as a situation that could leave Xbox “unrecognisable” by the end of the month.

Why this could be especially damaging for Arkane

These cancellation fears are arriving despite earlier, more optimistic signals from within the Blade team. Developers have reportedly asked for additional time to finish the game, and insiders have claimed the project is performing well. On top of that, Bethesda’s Todd Howard recently commented in an interview, saying Arkane is doing “really, really great job,” and that he personally liked what he had seen of Blade.

What to watch next

The broader context here is a rumored wave of layoffs expected to take place sometime next week, described as one of the biggest layoff events in video game history. Several Xbox-owned studios—including Double Fine, Compulsion, Ninja Theory, and even Undead Labs—have been mentioned as potential targets. Now, Arkane is reportedly being pulled into the same conversation.

For players, the immediate takeaway is uncertainty: even games that were expected to be relatively close to release may still be at risk if budget and internal strategy shift quickly. The best near-term “watch list” is whether Blade gets any official movement—either a continued push toward launch or confirmation that the project is being reconsidered—alongside further details on the rumored layoffs and how intense they end up being.