Microsoft axes Perfect Dark, Everwild amid layoffs

Microsoft's recent workforce reductions have led to the cancellation of several anticipated games, including Perfect Dark and Rare's Everwild. Here's what we know about the shutdown projects and Xbox's strategy behind these major cuts.

Microsoft Restructuring Impacts Game Development

Creative Exodus at Rare Following Everwild Cancellation

Microsoft confirmed nearly 9,000 job cuts on July 2, including the termination of Rare's Everwild project. Xbox Game Studios Head Matt Booty addressed staff in an internal communication obtained by Windows Central.

"These strategic adjustments reflect our need to realign priorities and allocate resources effectively amid industry transformation," Booty explained.

The Everwind cancellation coincides with the departure of Rare's longtime creative director Gregg Mayles after 35 years. Mayles, known for Banjo-Kazooie and Sea of Thieves, had been guiding Everwild's development since its 2021 reboot. Executive Producer Louise O'Connor is also exiting the studio.

First unveiled in 2019, Everwild had remained largely under wraps since its 2020 trailer. Xbox leadership maintained optimism about progress until recent weeks.

The Initiative Shuttered Alongside Perfect Dark Reboot

The closure of Santa Monica-based studio The Initiative marks another casualty, ending development on their Perfect Dark revival. Announced in 2020 with gameplay revealed earlier this year, this modern take on Rare's classic franchise had generated significant fan interest.

Widespread Impact Across Microsoft Gaming

The restructuring extends beyond specific titles. Bloomberg reports ZeniMax Online Studios canceled an undisclosed project while reducing staff by 10%. Reports also indicate workforce reductions at Call of Duty studios Raven Software and Sledgehammer Games, along with Turn 10 Studios.

In his staff memo, Xbox head Phil Spencer framed the moves as necessary strategic pruning: "To sustain Gaming's momentum, we must concentrate resources on our strongest opportunities while improving organizational agility."

This marks Xbox's fourth major workforce reduction since its $69 billion Activision acquisition closed in October 2023, reflecting intensified pressure to demonstrate financial returns from the gaming division.