It has now been officially confirmed (first reported by Windows Central) that Xbox has cancelled Perfect Dark, the long-awaited revival of the iconic franchise being developed by the newly formed “AAAA” studio The Initiative. Alongside this, Microsoft has shut down The Initiative and ended its collaboration with Crystal Dynamics, the studio behind Tomb Raider that was also involved in Perfect Dark. Below is a section from the memo sent out by Xbox’s Matt Booty:

“As part of this, we are closing one of our studios, The Initiative,” Booty stated. “These decisions, along with other adjustments across our teams, reflect a broader effort to realign priorities and focus resources to better position our teams for success amid an evolving industry landscape. These were not easy choices to make, as every project and team represents years of hard work, creativity, and dedication.”

Perfect Dark was first unveiled at The Game Awards in 2020, but very little has been shared publicly since then, aside from a short glimpse of what appeared to be gameplay footage. In that context, the cancellation might not come as a complete surprise, though Microsoft had invested heavily in the project, ultimately leading to its failure. Alongside Fable, it was seen as one of the major upcoming Xbox titles fans could look forward to from beloved franchises. Now, only Fable remains—though, of course, the day isn’t over yet.

While this may be the most prominent cancellation today, it’s far from the only one so far. Earlier news revealed that Rare’s original IP Everwild would be cancelled without ever receiving a full public reveal, as would an MMORPG project that Zenimax—studio behind The Elder Scrolls Online—was working on. We’re still trying to determine the exact number of layoffs accompanying these cancellations, but they appear to be substantial, affecting more than just the teams directly involved in the projects.

Bear in mind, we’re only halfway through the day, and it’s unclear how many more teams, departments, or games will be impacted by these widespread Microsoft layoffs. This follows a series of controversial strategic shifts for the Xbox brand, including a pivot away from its struggling hardware business toward growth in Xbox Game Pass subscriptions, cloud gaming, and the surprising decision to release nearly all new first-party titles on rival platforms like PlayStation. However, this round of cuts goes well beyond Xbox, as Microsoft slashes 9,000 jobs globally. What happens next—today or in the coming days—remains to be seen.

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