Xbox Reportedly Considering Cancelling Highly Anticipated Marvel Game

It’s reported that Microsoft is considering cancelling a highly anticipated Marvel game and selling its talented studio for good measure.

It’s not been a good few years for the Xbox brand. Despite dominating PlayStation within the Xbox 360 era, Microsoft fell behind Sony in the following gen with PlayStation 4, with the Sony console shifting more units and offering quality first-party exclusives.

Things haven't gone much better in this generation either. But to be fair, it feels like video game console manufacturers have been struggling across the board lately. However, it does seem like the Nintendo Switch 2 is doing very well for itself in terms of console sales since its launch in 2025.

Microsoft Reportedly Cutting Back on Game Development Studios

While Microsoft hasn't confirmed the speculation yet, rumours have been making the rounds in recent weeks that multiple studios under its umbrella are to be closed or sold. Some of those studios include games that were only showcased at Summer Game Fest this year, such as the third Hellblade game, Senua, as well as State of Decay 3.

READ MORE: 5 Xbox Studios Set For Potential Closure Amid ‘Massive’ Industry-Changing Layoffs

Marvel’s Blade was announced at The Game Awards 2023, and it would be Xbox’s first exclusive Marvel game. Furthermore, it’s being developed by Arkane Studios, the team that has brought us the fantastic Dishonored series and Deathloop. It’s also responsible for the colossal flop of 2023, Redfall, but the less said about that game, the better.

Since Marvel’s Blade was announced in 2023, we’ve not heard much about its developmental progress, nor have we seen a gameplay trailer, let alone a release date or window. This, understandably, has caused some concern among gamers, fearing that the project may never see the light of day.

However, in May 2026, Bethesda Softworks' head honcho, Todd Howard, provided a positive update on Marvel’s Blade, saying during an interview with Entertainment Weekly, “I'm not at liberty to say when [we'll see more]. But I saw some stuff just yesterday [21 May], and the folks at Arkane [Studios] are doing a really, really great job.”

Unfortunately, Marvel’s Blade May Be Facing a Troubled Future

As brought to our attention by Windows Central, The Verge reports that Microsoft is not only considering another round of layoffs, but is also considering selling Arkane Studios.

While this isn't guaranteed to be bad news for Arkane Studios, it does raise some concerns that Microsoft has lost interest in the developer. However, let’s say that Microsoft is actively trying to sell the studio. What happens if it’s not sold?

Would Microsoft still want to support Arkane Studios and allow them to see through the development of Marvel’s Blade? Only time will tell. That being said, it’s quite baffling that with the next generation just around the corner, you’d think that Microsoft would want to keep hold of its best studios if it wants to swing the tide of the console war, and Arkane Studios is absolutely one of its most talented.

The report from The Verge also claims that Marvel’s Blade was targeted to release this year, but has been internally delayed until late 2027. This might suggest that development hasn't gone too smoothly behind the scenes.

Of course, it’s worth keeping in mind that these reports haven't been officially confirmed yet, so we should take them with a pinch of salt until proven otherwise. But we’ll let you know if we learn something substantial.

If Marvel’s Blade ever sees the light of day, it will arrive on PC and Xbox.

READ MORE: Elder Scrolls Game Officially Shutdown Amid Mass Xbox Studio Closures