Xbox has cancelled its Perfect Dark reboot and closed its developer, it has been confirmed.
In a statement,XboxGame Studios’Matt Bootysaid the decisions “reflect a broader effort to adjust priorities and focus resources to set up our teams for greater success within a changing industry landscape”.
Santa Monica, California-basedThe Initiativewas established in 2018 by formerCrystal Dynamicsboss Darrell Gallagher, along with a host of veteran developers.Perfect Darkwas to be the studio’s first title.
Xbox finallyshowed gameplay for the Perfect Dark rebootlast summer, four years after its announcement. According to reports, the game had been througha challenging development. VGC reported in March 2022 that the Xbox studio hadseen a “fast and furious” wave of senior departuresover the previous year.
In a company-wide email announcing The Initiative’s closure,Microsoftalso confirmedthe cancellation of Rare’s Everwild, which VGC exclusively reported earlier today.
Booty’s email to company staff, viaWindows Central, reads:
“Following Phil’s note, I want to share more about the changes to the Studios business units.
We have made the decision to stop development of Perfect Dark andEverwildas well as wind down several unannounced projects across our portfolio. As part of this, we are closing one of our studios, The Initiative. These decisions, along with other changes across our teams, 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.
Our overall portfolio strategy is unchanged: build games that excite our players, continue to grow our biggest franchises, and create new stories, worlds, and characters. We have more than 40 projects in active development, continued momentum on titles shipping this fall, and a strong slate headed into 2026.
For those directly affected, we are working closely with HR and studio leadership to provide support, including severance, career transition assistance, and where possible, opportunities to explore roles on other teams.
To everyone across our studios: thank you. Your creativity and resilience continue to define who we are. I believe in the strength of our teams and the direction we’re taking on the path ahead.” — Matt Booty, Xbox Game Studios
Microsoft confirmed a significant wave of layoffson Wednesday, which could reportedly see as much as 4%, or roughly 9,100, of the company’s total employees, across all departments, including gaming, affected.
“We continue to implement organizational and workforce changes that are necessary to position the company and teams for success in a dynamic marketplace,” a Microsoft spokesperson said.
In a message sent to all staff, Microsoft’s head of gaming,Phil Spencer, stated that the cuts were designed to “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.”
