Perfect Dark, Everwild, and several other titles are being cancelled as part of Microsoft's recent layoffs. This article details the games affected and the reasons behind Xbox's major workforce reduction.
Games Cancelled and Studio Closed in Microsoft Layoffs
Rare Director Departs Following Everwild Cancellation
On July 2, Microsoft announced it would lay off approximately 9,000 employees, a move that includes cancelling several games, including Rare's newest intellectual property, Everwild. As reported by Windows Central on the same day, Xbox Game Studios Head Matt Booty communicated these changes to staff via an internal email.
"These decisions, along with other organizational shifts, are part of a wider strategy to realign our priorities and resources, positioning our teams for greater success in an evolving industry," Booty stated in the email.
In the wake of Everwild's cancellation, veteran Rare game designer Gregg Mayles is leaving the company after a 35-year tenure. Mayles contributed to many of the studio's iconic titles, such as Banjo-Kazooie, Sea of Thieves, and Donkey Kong Country. Executive Producer Louise O'Connor will also be departing.
Mayles had been leading development on Everwild since the team was reorganized in 2021. The project was in development for nearly a decade, having first been announced in November 2019. Information on its progress was limited following a trailer released in July 2020. However, in February 2025, Xbox CEO Phil Spencer commented on Everwild's development, noting it was advancing steadily.
Despite the significant time and resources Rare dedicated to the project, Everwild was included in the list of cancelled games. "We did not arrive at these decisions easily, as each project and team embodies years of hard work, creativity, and dedication," Booty explained.
Perfect Dark Cancelled as The Initiative Studio Closes
Another casualty of Xbox's workforce reduction is the eagerly awaited eco sci-fi shooter, Perfect Dark. This reboot of Rare's classic stealth shooter was being developed by The Initiative, a studio founded in 2018.
Perfect Dark was first unveiled in 2020, with gameplay finally shown during the 2024 Xbox Games Showcase. Despite considerable fan interest in the revival, the studio had remained quiet about the project since that reveal.
Widespread Job Cuts Within Microsoft Gaming
The impact of Xbox's layoffs extends beyond the cancellation of Perfect Dark and Everwild and the shuttering of The Initiative. According to a July 2 report by Bloomberg's Jason Schreier, numerous studios and developers across Microsoft Gaming were notified of these extensive cuts, including the team behind The Elder Scrolls Online at ZeniMax Online Studios.
A planned new online game from ZeniMax has been discontinued, and the studio will reduce its staff by 10%. Internal reports also suggest that Call of Duty studios Raven Software and Sledgehammer Games, alongside Halo developer 343 Industries and Forza Motorsport's Turn 10 Studios, will see team reductions.
Spencer addressed the layoffs in an email to staff, saying, "To ensure Gaming's long-term success and allow us to concentrate on strategic growth areas, we are halting or scaling back work in certain parts of the business. We are also following Microsoft's initiative to streamline management structures to enhance agility and effectiveness."
While he affirmed that Xbox's "platform, hardware, and game pipeline have never been stronger," Spencer emphasized the necessity to "make prudent decisions today to secure our success in the years ahead, which requires the discipline to focus on our most promising opportunities."
This marks the fourth round of layoffs at Xbox within the last 18 months. The gaming division faces increasing pressure to boost profitability, particularly following the company's massive $69 billion acquisition of Activision in October 2023.
