Microsoft Cancels Major Xbox Games Amid Second-Largest Layoff in Company History

 

Microsoft Cancels Major Xbox Games Amid Second-Largest Layoff in Company History





Microsoft Cancels Perfect Dark, Everwild, and More Xbox Titles Following Massive Layoffs

Microsoft has announced the cancellation of several major Xbox game titles as part of a sweeping restructuring plan that includes the layoff of approximately 9,000 employees — nearly 4% of its global workforce. The move marks one of the largest layoffs in the company's history and significantly impacts its gaming division.

The news surfaced through an internal memo obtained by Variety, in which Phil Spencer, CEO of Microsoft Gaming, outlined the company’s shift toward “strategic growth areas” and efforts to simplify management layers. “To position Gaming for enduring success, we will end or decrease work in certain areas,” Spencer stated.

Major Titles Affected: Perfect Dark and Everwild

Among the most high-profile casualties are the Perfect Dark reboot and Everwild, both of which had generated substantial anticipation within the gaming community.

In a separate internal communication, Matt Booty, head of Xbox Game Studios, confirmed the shutdown of development for both projects. “We have made the decision to stop development of Perfect Dark and Everwild, as well as wind down several unannounced projects,” he said.

The studio responsible for Perfect Dark, The Initiative, is also being dissolved. Founded in 2018, the team was created specifically to bring the iconic shooter franchise back to life, with the game first teased at the Xbox Games Showcase in 2024.

Everwild, a new IP from Rare (developers of Sea of Thieves), had faced repeated setbacks since its announcement in 2019, including several internal reboots that delayed its progress for years.

ZeniMax's MMORPG and Other Studio Cuts

Another project impacted is Blackbird, an unannounced MMORPG developed by ZeniMax Online Studios, known for Elder Scrolls Online. The game had reportedly been in development since 2018 and was intended to be a spiritual successor to ESO. According to Bloomberg’s Jason Schreier, the project has now been shelved.

The layoffs have also touched several other Microsoft-owned studios:

  • 343 Industries, creators of Halo, laid off at least five employees. While development on new Halo content is expected to continue, the studio is now down to 200–300 staff.
  • Turn 10 Studios, known for Forza Horizon, reportedly cut more than 70 employees.
  • King, the developer behind Candy Crush (acquired in the 2023 Activision Blizzard deal), has let go of around 200 employees — nearly 10% of its workforce, mostly in Stockholm.
  • Raven Software, known for its work on Call of Duty: Black Ops Cold War and the upcoming Black Ops 6, has also been impacted by job reductions.

Games Still in Development

Despite the significant changes, Microsoft has assured fans that all games showcased during the Xbox Games Showcase in June 2025 will remain in development.

Restructuring for Long-Term Vision

Microsoft’s layoffs and studio closures appear to be part of a larger strategy to streamline its gaming business and focus on core titles and platforms. While the loss of highly anticipated games is a blow to many fans, the company insists that these measures are designed to build a stronger, more focused Xbox ecosystem in the years ahead.

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