Undead Labs and Arkane Lyon Are the Latest Xbox Studios Facing Potential Closures

· Paul Thurrott · June 30, 2026, 9:35 p.m.
games xbox microsoft game development gaming-industry Undead Labs
Summary
Microsoft is exploring options to sell Undead Labs, known for developing State of Decay 3, and is possibly canceling Marvel's Blade or closing Arkane Lyon. This move has raised concerns about the future of these Xbox studios.
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