Perfect Dark, Everwild, and other titles cancelled amidst Microsoft layoffs. Read on to learn more about the titles that were shut down and Xbox’s reasoning for the massive layoffs.

Microsoft Layoffs Cancelled Games and Closed Studio

Rare Director Leaves Studio Amidst Everwild Cancellation

On July 2, Microsoft revealed plans to lay off approximately 9,000 employees, which involved the cancellation of several games, including Rare's upcoming title, Everwild. As reported by Windows Central on July 2, Xbox Game Studios Head Matt Booty sent an internal email to staff explaining the decision.

"These decisions, along with other team adjustments, are part of a broader strategy to realign priorities and allocate resources more effectively to help our teams thrive in an evolving industry," Booty wrote in the message.

With the cancellation of Everwild, longtime Rare game designer Gregg Mayles will exit the company after 35 years. He contributed to many iconic titles from the studio, such as Banjo-Kazooie, Sea of Thieves, and Donkey Kong Country. Executive Producer Louise O’Connor will also be leaving the company alongside him.

Mayles had been working on Everwild since the team was reorganized in 2021. The game had been in development for nearly a decade, first announced in November 2019. However, updates became sparse after a trailer release in July 2020. In February 2025, Xbox CEO Phil Spencer commented on the project, stating it was progressing steadily.

Despite the long time invested by Rare into Everwild, it is among the titles being cut by Xbox. "These were not easy decisions, as every project and team represents countless hours of creativity, effort, and dedication," Booty added.

Perfect Dark Cancelled as Studio The Initiative Shuts Down

Another casualty of Xbox’s restructuring is the highly anticipated futuristic eco sci-fi shooter, Perfect Dark. The reboot of Rare’s classic stealth franchise was led by the newly formed team, The Initiative, established in 2018.

The game was initially announced in 2020, with gameplay footage shown during the Xbox Games Showcase in 2024. Since then, however, no further updates have been shared, despite high anticipation for the revival.

Job Cuts Across Microsoft Gaming

In addition to cancelling Perfect Dark and Everwild and closing The Initiative, Microsoft Gaming has seen widespread layoffs across its divisions. According to a report by Bloomberg’s Jason Schreier on July 2, multiple studios and developers were impacted, including ZeniMax Online Studios, the developer behind Elder Scrolls Online.

ZeniMax’s new online title has been scrapped, and the studio will reduce its workforce by 10%. Reports also suggest that Call of Duty developers Raven Software, Sledgehammer Games, Halo Studios, and Forza Motorsport’s Turn 10 Studios are all facing reductions.

Phil Spencer addressed the layoffs in an email to employees, stating, "To ensure Gaming’s long-term success and allow us to focus on key growth opportunities, we’ll be scaling back or ending work in certain areas and following Microsoft’s lead in streamlining management to improve agility and performance."

Though he emphasized that Xbox’s "platform, hardware, and game roadmap have never looked stronger," Spencer acknowledged the need to make strategic choices today to secure future success, noting that focusing on the most promising opportunities is essential.

This marks the fourth round of layoffs within Xbox over the past 18 months, as the gaming division faces pressure to generate higher profits following the acquisition of Activision in October 2023 for $69 billion.

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