The cancellation of *Perfect Dark*, *Everwild*, and other projects follows major layoffs at Microsoft. Continue reading for details on the terminated games and the reasoning behind Xbox's significant workforce reduction.
Games Cancelled and Studio Closed Following Microsoft Layoffs
Rare Director Departs Following Everwild's Cancellation
Microsoft confirmed on July 2 its plan to reduce its workforce by approximately 9,000 employees, a move that includes canceling several game titles, such as Rare's newest intellectual property, *Everwild*. As reported by Windows Central on the same day, Xbox Game Studios Head Matt Booty communicated the situation to staff via an internal email.
"These decisions, combined with other organizational shifts, are part of a broader strategy to realign our priorities and concentrate 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 acclaimed titles, including *Banjo-Kazooie*, *Sea of Thieves*, and *Donkey Kong Country*. Executive Producer Louise O'Connor will also be departing alongside him.
Mayles had been leading development on *Everwild* since the team was reassembled in 2021. The project, which had been in development for nearly a decade since its initial announcement in November 2019, saw few public updates following a trailer in July 2020. However, in February 2025, Xbox CEO Phil Spencer commented on the game's steady progress.
Despite the extensive development time invested by Rare, *Everwild* was included in the list of canceled projects. "We did not arrive at these conclusions lightly, as each project and team embodies years of dedication, creativity, and hard work," Booty explained.
Perfect Dark Cancelled as The Initiative Studio Closes
Another casualty of the Xbox layoffs is the eagerly awaited eco sci-fi shooter, *Perfect Dark*. The reboot of the classic Rare stealth franchise was being developed by The Initiative, a studio founded in 2018 to handle the project.
*Perfect Dark* was officially announced in 2020, with a gameplay debut at the Xbox Games Showcase in 2024. Following this reveal, the studio remained quiet about the game's status, despite considerable fan interest in the revival.
Widespread Job Cuts Across Microsoft's Gaming Division
Beyond the cancellation of *Perfect Dark* and *Everwild*, and the shuttering of The Initiative, the layoffs impacted numerous teams within Microsoft Gaming. According to a July 2 report by Bloomberg's Jason Schreier, many developers received notifications, including staff at ZeniMax Online Studios, known for *The Elder Scrolls Online*.
ZeniMax's planned new online game has been terminated, leading to a 10% reduction in its workforce. Insider sources also suggest that *Call of Duty* supporting studios Raven Software and Sledgehammer Games, alongside *Halo* and *Forza Motorsport* developers, will see team reductions.
Spencer addressed the layoffs in an email to employees, stating, "To ensure Gaming's long-term success and sharpen our focus on key growth areas, we will discontinue or scale back certain business operations. We are also streamlining management structures, following Microsoft's lead, to enhance agility and effectiveness."
Although he emphasized that Xbox's "platform, hardware, and upcoming game lineup have never been stronger," Spencer noted the necessity to "make prudent decisions today to secure success in the years ahead, which requires the discipline to prioritize our most promising opportunities."
This marks the fourth round of layoffs at Xbox within the last 18 months. The gaming division faces increased pressure to boost profitability, particularly after Microsoft's acquisition of Activision in a landmark $69 billion deal finalized in October 2023.
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