Microsoft today announced that it will cancel development of its Perfect Dark and Everwild titles and close The Initiative studio. The decision follows broader layoffs affecting around 9,000 employees across Microsoft and significant cuts within the Xbox division. Matt Booty, president of game content and studios at Xbox, outlined the changes in an internal memo to staff.
Leadership Statement
In his message, Booty expressed gratitude for the creativity and dedication of all teams. He explained the company will stop work on Perfect Dark and Everwild and wind down unannounced projects. The Initiative studio will be shut down. Staff affected by these changes will receive severance support and help finding new roles within Microsoft, where possible.
Industry Context
These cancellations come as Microsoft aims to streamline its portfolio amid a shifting market. Last month, Xbox also reduced staff at Turn 10 Studios, the maker of Forza Motorsport, reflecting a focus on core franchises and new projects with strong player demand. The layoffs across Microsoft follow cost cuts announced in May and highlight the company’s effort to balance investment in artificial intelligence and cloud services with its gaming ambitions.
Impact on Teams
Perfect Dark and Everwild represented years of work and ambition to build new worlds. The Initiative’s closure will displace dozens of developers who joined the studio to revive one of Xbox’s classic series. Everwild, developed by Rare, had promised an original universe built around nature and community. Team members will explore open roles across Xbox Game Studios or receive career transition assistance.
What’s Next
Booty reaffirmed Xbox’s strategy to grow its major franchises while nurturing fresh ideas. More than forty titles remain in active development, including anticipated releases later this year and into 2026. Microsoft’s investment in high‑profile series such as Halo, Forza, and Minecraft continues alongside its subscription services. The shakeups focus on studio resources to develop projects that will address the expectations of the players and market opportunities.
The next steps in Microsoft will be aimed at providing quality experiences through the rest of the studios it possesses. The management of the company has promised to continue paying those employees who have lost their jobs and also stay in motion with major titles. With the evolution of the industry, Xbox strives to change its development strategy in order to support its reputation for various and entertaining games to its worldwide consumers.