Arkane Lyon Says Microsoft Froze Its Hiring — Then Blamed the Studio for the Delay

The fight over Arkane Lyon stopped being polite on Wednesday. In an open letter published November 4, the STJV — the Syndicat des Travailleureuses du Jeu Vidéo, the French union that represents the studio's workers — accused Microsoft of sabotaging Marvel's Blade, the game Arkane Lyon has been building since 2023. The charge is specific: Microsoft froze hiring across the group for 19 months, and the delays and extra costs that followed are now the very ones Microsoft points to when it explains why the studio has to go.

"Microsoft chose to justify the closure on economic reasons," the letter reads. "But Microsoft is actually why those economic reasons even exist." The freeze, the union says, "artificially" created delay and additional cost — and Microsoft now uses those same delays and costs as its reason to close the studio down.

By the union's account, the game is not the problem. Work on Blade "is going fine," the letter says, at the level of quality players expect from the studio behind Dishonored, Dishonored 2 and Deathloop. "Arkane is profitable," the union says. "Just not profitable enough in Microsoft's eyes." The letter adds that the studio's cash is regularly swept up to the group through a cash-pooling arrangement, and that closing the studio and cancelling Blade would probably cost more than finishing the game. "Our studio might get closed because, and only because, Microsoft decided to," the letter says, "even if that means sabotaging the game it funded."

From July's restructuring to December 13

The studio's future has been in question since July, when Xbox's restructuring under chief executive Asha Sharma put Arkane's management into the consultation French law requires — a formal process with the works council over the studio's options. In October, Le Monde reported that Microsoft intends to close the studio. Under France's Florange law, a company of Microsoft's size has to run a genuine search for a buyer before it can shut a site, and that process had been set to run out on November 13. Microsoft has since extended the consultation by one month, to December 13.

Microsoft's answer

Microsoft has not answered the letter directly. Its stated position, given to PC Gamer: "We have 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. This is a defined extension, and we remain committed to keeping the Works Council informed throughout the process." The company has also said the closure documents are part of the legally required consultation and do not establish that a closure has been finalized, and that it is "actively seeking a partner to support the next phase of development and enable the commercialization of the project." It has not committed to keeping the studio open.

The bids are reported — nothing more

What happens next may already be on the table, but none of it is confirmed. Bloomberg reported on November 3, citing people familiar with the negotiations who were not authorized to speak publicly, that Ubisoft and at least two other gaming companies have submitted bids for Arkane, and that Xbox has also weighed selling the studio to its own management. The terms were not disclosed, no agreement has been reached, and neither Microsoft nor Ubisoft has confirmed any bid. That is reporting, not fact: the confirmed facts are the consultation, the extension, and the deadline.

What the workers are asking for

If no serious buyer or deal lands, the union says, Arkane closes: 217 employees lose their jobs, along with freelancers, contractors and support staff. The STJV called the extra month "a step forward" but "far from enough." Its demands: a real voice for workers in choosing any buyer, through the works council and the unions; a protection fund if a new owner makes redundancies within 24 months of a sale; and, if the studio closes anyway, €200,000 in severance per worker, two years of redeployment leave paid by Microsoft, and matching compensation for freelancers. The letter also notes, pointedly, that Microsoft's net profit last year was more than $133 billion.

The game in the middle of this is the one Arkane announced at The Game Awards in December 2023: a mature, single-player, third-person Blade, an original story set in a quarantined section of Paris in the middle of a supernatural emergency, directed by Dinga Bakaba with co-creative director Sebastien Mitton. It is still officially in development — Bethesda and the studio's own channels still list it that way — and a union representative has described production as nearing its end, though that is the union's assessment, not an official progress report. No release date has ever been announced.

December 13 now decides two things at once: whether one of the most distinctive studios in games survives, and whether the Blade game it has spent three years building ever reaches the players it was announced to. The union's letter argues the deadline itself was manufactured. Microsoft's answer, so far, is one more month of process. The clock is the story now.