Ubisoft Joins Bidding for Arkane Lyon as Xbox Weighs the Studio’s Future

Ubisoft has submitted an offer to acquire French game developer Arkane Lyon from Microsoft, and at least two other gaming companies have also made bids, according to a Bloomberg report by journalist Jason Schreier. Microsoft’s Xbox division has not reached an agreement with any potential buyer. It has also considered selling the studio to its own management, which would allow Arkane Lyon to operate independently. An Xbox spokesperson told Bloomberg that the company is exploring options ahead of a December deadline but declined to comment further. The negotiations affect the team behind Dishonored and Deathloop, as well as the studio’s in-development game Marvel’s Blade. Arkane Lyon has about 217 employees and was included in Microsoft’s restructuring and divestment plans announced during the summer. French labor rules require large companies to search for potential buyers before closing certain workplaces, so the studio remains in a consultation and negotiation process. The report does not mean Ubisoft has completed an acquisition or that Microsoft has decided to close the studio.

Ubisoft is one of at least three potential buyers

Bloomberg, citing people familiar with the negotiations, reported that Ubisoft and at least two other gaming companies have submitted offers to Microsoft for Arkane Lyon. The identities of the other bidders, the value of the offers, the proposed transaction structure and the treatment of the studio’s existing intellectual property have not been disclosed. Xbox has also considered a management buyout that would allow the studio to leave Microsoft and become independent. Ubisoft is headquartered in France and operates a large publishing network with several European development teams, making it a plausible potential buyer from a geographic and industry perspective. The two companies have also worked together on games in the past. But Ubisoft has been undergoing its own restructuring, layoffs and project cancellations. Whether it could provide Arkane with stable funding and creative independence remains an open question. A bid does not guarantee a deal. Microsoft could choose Ubisoft, another bidder, a management buyout or a different arrangement. The company has not publicly selected a preferred buyer.

French labor rules give the studio more time to negotiate

Arkane Lyon is based in Lyon, France, and has about 217 employees. Under France’s Florange law, qualifying large companies must seek a buyer before closing certain facilities and must consult employee representatives. Microsoft originally set November 13 as the end of the consultation period but later extended the process by one month, into mid-December. PC Gamer and Video Games Chronicle reported that Microsoft said the extension would allow it to continue exploring options, including finding a partner to support the studio through the remaining development work. Le Monde previously reported that employee representatives believed the studio was not in a financial condition that justified closure and questioned Microsoft’s stated economic rationale. The union said about 217 jobs were at risk and that workers hoped to preserve the team through a sale, a management buyout or another arrangement. Microsoft has not disclosed a valuation, a final number of layoffs or a confirmed closure date. The French process does not guarantee that the studio will be sold. It provides time for consultation and for potential buyers to make proposals. If no acceptable arrangement is reached, closure and job losses remain possible.

Marvel’s Blade is a central part of the negotiations

Arkane Lyon is developing Marvel’s Blade, an action-adventure game based on the Marvel character. The project was announced in 2023, but it has no official release date and Microsoft has not published a full gameplay or platform schedule. Bloomberg reported that the game could be released within the next one to two years. The French union has described it as close to completion. Those accounts come from different sources, and neither Microsoft nor Arkane has publicly confirmed the game’s completion status. The union’s description should not be treated as an official development update. If Arkane is sold, the buyer and Microsoft will need to determine who continues development, who publishes the game and how Marvel’s licensing agreement is handled. Microsoft has previously said it is looking for a partner to support the next phase of development and commercialization. Whether Ubisoft, another company or Arkane’s own management takes over, the ability to finish Blade will be an important test of whether a transaction protects both employees and the project. The future of the game’s intellectual property is also unclear. A sale of the studio would not automatically establish who owns or controls the rights to Blade, Dishonored or Deathloop. Those arrangements would depend on the terms of any agreement.

Arkane Lyon is not the same studio as the closed Arkane Austin

Arkane Lyon is the French studio behind Dishonored, Dishonored 2 and Deathloop, and it is currently developing Marvel’s Blade. Arkane Austin was a separate US-based studio in Texas. Microsoft closed Arkane Austin in 2024 and later ended further support for Redfall. Although both teams used the Arkane name, they were separate operations in different locations. The current bidding process concerns Arkane Lyon, not the already closed Arkane Austin. The distinction matters because Arkane Lyon has a distinctive development history. Its games are known for immersive-simulation design, detailed levels and player freedom. Those creative traditions are not identical to Ubisoft’s large open-world franchises. If Ubisoft acquires the studio, its ability to preserve Arkane’s creative independence will influence the team’s future projects.

No deal has been announced, leaving staff and players waiting

As of November 4, Microsoft had not confirmed a buyer or disclosed the value or timing of a transaction. Ubisoft had not publicly confirmed the details of its bid, and the other two potential buyers had not been identified. Microsoft is using the extended French consultation process to consider options, but the December deadline means employees still face several possible outcomes: a sale to Ubisoft, a sale to another company, a management buyout or closure. For players, the immediate question is whether Marvel’s Blade will be completed and who will control the related intellectual property. For employees, the key issues are whether a buyer will retain jobs, compensation and project resources. The confirmed facts are that multiple parties have submitted offers and Microsoft is still evaluating them. No acquisition or publishing arrangement has been finalized.