Microsoft Layoffs Are Here and These 3 Games Have Already Been Canceled

CNET

2 days ago

Microsoft is moving ahead with mass layoffs, cutting a little less than 4% of its workforce or about 9,000 roles across the company. As a result, multiple games brewing within Xbox Game Studios were canceled, including some fairly high-profile projects.
When reached for comment, Microsoft directed CNET to reports Wednesday by Variety, confirming their accuracy.
"To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft's lead in removing layers of management to increase agility and effectiveness," Microsoft Gaming chief Phil Spencer wrote in a staff memo Wednesday morning, as published by Variety.
Xbox Game Studios head Matt Booty confirmed the game cancellations in an internal email published by Variety, naming Perfect Dark and Everwild specifically, as well as other "unannounced" titles.
"We have made the decision to stop development of Perfect Dark and Everwild as well as wind down several unannounced projects across our portfolio," Booty wrote in the email. "As part of this, we are closing one of our studios, The Initiative."
Booty added that the decisions to axe these games "reflect a broader effort to adjust priorities and focus resources to set up our teams for greater success within a changing industry landscape. We did not make these choices lightly, as each project and team represent years of effort, imagination and commitment."
What Xbox games have been canceled?
Perhaps the most significant title canceled amid these new layoffs was a reboot of the classic FPS series, Perfect Dark. The studio that had been working on this new title, The Initiative, will be shut down entirely.
The long-awaited new entry in the sci-fi espionage series has been in the works since the studio opened in 2018 and first showed off gameplay footage for the title during an Xbox Games Showcase in June 2024.
Another notable title getting the axe is Everwild, a long-gestating new IP from Rare, the revered British studio Sea of Thieves, which Microsoft acquired in 2002. Over the decades, the studio has also produced the original Donkey King Country games for the SNES, the original Perfect Dark for the Nintendo 64, Conker's Bad Fur Day and the Banjo-Kazooie series.
According to unnamed sources who spoke to Video Games Chronicle, numerous job cuts and a broader restructuring are expected at Rare, resulting in the game's cancellation. The sources also confirmed reports over the years about Everwild's somewhat turbulent development, claiming that it had "struggled to nail down a clear direction for the title."
The game has reportedly been in development for the better part of a decade, being officially announced in 2019, followed by a trailer in 2020. In 2021, reports emerged that development on the game had been "rebooted."
The other title reportedly put out to pasture was an untitled new MMORPG from Zenimax Online Studios, the creator of the popular MMO Elder Scrolls Online, which has reportedly reached upward of 25 million players since launching in 2014.
Details about what this title was are sparse, with Bloomberg's Jason Schreier reporting that the game went by the codename "Blackbird" and had been in the works since 2018. Windows Central said in its report about Perfect Dark's cancellation that Blackbird was once intended to act as a successor of sorts to Elder Scrolls Online.
David Lumb, a senior reporter at CNET, noted how these new developments at Microsoft underscored the recent job instability in the gaming industry, as well as the uncertainty the cancellations are sure to cause among gamers.
"The biggest losses are to the seemingly thousands of people who are out of a job in a tumultuous industry that's seen record layoffs year over year," Lumb explained, adding, "The cancellations of big games like the upcoming Perfect Dark and Rare's next game Everwild are concerning for Microsoft's next few years of releases, but also to confidence that a game being teased at, say, an Xbox Showcase will end up coming out."
According to Variety, all games that were shown off during the 2025 Xbox Games Showcase in June will continue being developed.