Gaming Industry Layoffs Continue as Arkane Studios Austin Closes

Redfall, the final game from Arkane Austin. Microsoft announced the studio's closure today as part of wide-sweeping cuts in their gaming division (Image Courtesy of Arkane Studios Austin/Bethesda)

Another blow to Austin's gaming industry: Bethesda Studios is closing Arkane Studios Austin, the studio behind the Dishonored series, Prey, and Redfall.

The news of its closure came from Wesley Yin-Poole at IGN, who reported that it was being shuttered by the Microsoft-owned Bethesda Studios as part of a round of cuts. Also closing will be Canada's Alpha Dog Games (Mighty Doom) and Tokyo's Tango Gameworks (Hi-Fi Rush), while Wisconsin-based Roundhouse Studios (formed from Rune II developer Human Head) will be absorbed into ZeniMax Online Studios (The Elder Scrolls Online).

The news was effectively confirmed by studio partner and co-creative director Harvey Smith, who tweeted that "I just want to say that I love all the people at Arkane Austin so much. Great times, hard times, we went through so much, together. Of course, today's news is terrible, for all of us. Your talent will lift you up, and I will do anything I can to help."

Arkane Lyon studio director and co-creative director and Deathloop director Dinga Bakaba (whose team will continue to work on third-person horror title Marvel's Blade) was far less diplomatic. He tweeted that "great teams are sunsetting before our eyes again, and it's a fucking gut stab."

The Austin-based developer opened in 2006 as the American wing of Arkane Studios SASU, based out of Lyon, France. The companies were acquired by XeniMax Media, parent company to Bethesda, in 2010, which in turn was acquired by Microsoft in 2021. In that time, the Austin team was part of the development of the steampunk FPS Dishonored and its various sequels and DLC, as well as the critically-acclaimed biohorror Prey and the time-scrambling Deathloop. In 2023, the studio published coop vampire-hunter Redfall, but the title faced delays and was met with poor reviews. An email to staff from Matt Booty, head of Xbox Game Studios, confirmed that the game will remain available and the servers will remain online, but updates and development of promised DLC is being canceled.

The layoffs are further devastating news in the gaming industry. An estimated 10,000 people globally lost their jobs in the sector in 2023, and that number is close to being matched already this year.