According to a report from Windows Central, which has been corroborated by Bloomberg, the latest casualty from Microsoft's massive 9,000+ employee layoff today is Xbox Game Studios team The Initiative, a team that was founded for the purpose of making a new Perfect Dark game. That Perfect Dark game is now cancelled, and The Initiative has been shuttered.
Windows Central had previously hinted towards this while reporting that ZeniMax Online's unannounced MMORPG had been cancelled, but has now confirmed the news after obtaining an email from Xbox Game Studios head Matt Booty. Booty's memo also confirms what had already been reported around Rare's Everwild being cancelled, and adds that "several unannounced projects" have also been cancelled as part of today's layoffs.
"Following Phil's note, I want to share more about the changes to the Studios business units," Booty begins, referencing an email sent out from Microsoft Gaming chief executive officer, Phil Spencer.
"We have made the decision to stop development of Perfect Dark and Everwild as 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 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."
The cancellation of Perfect Dark also brings an end to the partnership Xbox had with Crystal Dynamics, who was working on the project alongside The Initiative.
Players who grew up with the first Xbox consoles recognize Perfect Dark as one of the series that helped make the Xbox a household name. While the last official Perfect Dark outing failed to impress, the excitement around its reboot could not have been higher for fans. The Initiative was described as a team of industry veterans, all excited to bring back the beloved stealth series. We even got to see some fairly impressive gameplay last year, seemingly indicating that the game was progressing well and that we'd see it on shelves within the next two years.
Now, we'll never know what the final product would have looked like, as the failings of Microsoft's executive branch continue to devastate thousands of people across the video game industry.
While there have already been major cuts confirmed today, more are still inbound. Forza Motorsport studio, Turn10, has reportedly lost 50% of its staff, and several Call of Duty studios, including Raven Software, have also suffered layoffs as part of today's cuts. We'll continue to update our stories and report on the cuts as more details are confirmed.
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