Microsoft is implementing significant cuts to its Xbox and gaming divisions, resulting in the layoffs of thousands of employees and the cancellation of several projects. Among the canceled initiatives are the recently announced Perfect Dark Reboot, the highly anticipated new IP Everwild, and an unreleased IP from ZeniMax Online Studios.
Everwild was initially unveiled in 2019 as a new intellectual property from Rare, a studio renowned for creating several hit games, including Donkey Kong Country, Banjo-Kazooie, Conker, Sea of Thieves, and the original Perfect Dark. The project’s cancellation is directly tied to the recent announcement of extensive layoffs and cuts. Additionally, Gregg Mayles, one of Rare’s longest-serving and most influential designers, has announced his departure from the company due to these significant reductions.
Xbox’s studio, The Initiative, has experienced significant effects from recent major cuts. The studio was established in 2018, and their Perfect Dark reboot was revealed at the Game Awards in 2020, with gameplay showcased in 2024. Unfortunately, the studio is now facing complete closure, along with the cancellation of the upcoming Project Dark reboot.
Furthermore, ZeniMax Online Studio’s new unreleased IP has also been scrapped, resulting in layoffs of an unspecified number of staff members involved in the project, according to Windows Central. ZeniMax’s unreleased IP was rumored to be another MMORPG, given their past success with The Elder Scrolls Online; however, the public may never know what the concept was, now that it has been canceled.
This is all the more surprising, given that earlier this year, Xbox CEO Phil Spencer stated in a podcast interview that Xbox Game Studios has the luxury of allowing teams like Rare to work on projects like Everwild. This further continues the cycle of Xbox hyping up studios and their games before the time and cuts are eventually brought to light, as seen with the closure of Tango Gameworks, the creators of Hi-Fi Rush.
This marks Microsoft’s largest round of layoffs since 2023, and several other companies have been affected, including several that work on the Call of Duty franchise, such as Raven Software, Sledgehammer Games, and High Moon Studios. Phil Spencer sent a memo to the affected studios. For a full recap, click here.
