Earlier today, a massive wave of layoffs was announced by Microsoft, one that will affect roughly 9,000 staff, or 4% of the workforce, at the behemoth company. As expected, Microsoft"s gaming division, Xbox, has also been hit by these internal changes, and it"s not good news for several games and at least one studio.
According to an internal email seen by Windows Central, Xbox Games Studio head Matt Booty has confirmed layoffs, cancellations, and a studio shutdown.
Seven years after it was formed, The Initiative is being closed without producing any games. The first-party studio had been working on a reboot of Perfect Dark as its first project, with Crystal Dynamics providing support. The immersive sim experience has also been canceled alongside the studio closure. Microsoft has asked affected developers to apply for other jobs at the company.
"These decisions, along with other changes across our teams, reflect a broader effort to adjust priorities and focus resources to set up our teams for greater success within a changing industry landscape," Booty says in the internal email. "We did not make these choices lightly, as each project and team represent years of effort, imagination, and commitment."
At the same time, the Rare-developed Everwild, the mysterious game that only received a few cryptic trailers years ago, has also been canceled. The title was first announced in 2019, and reports have come out since then that said it had been rebooted at least once.
Moreover, according to Jason Schreier of Bloomberg, an unannounced MMORPG project from Zenimax Online (The Elder Scrolls Online) has been canceled too. Codenamed Blackbird, the game had been in development since 2018.
"Our overall portfolio strategy is unchanged: build games that excite our players, continue to grow our biggest franchises, and create new stories, worlds, and characters," added Booty. "We have more than 40 projects in active development, continued momentum on titles shipping this fall, and a strong slate headed into 2026."
As for other layoffs, reports are coming out that at least 10% of staff from mobile game developer King are being let go as well, while the staff numbers of Forza Motorsport developer Turn 10 are reportedly being cut by almost half. Call of Duty studio Raven Software seems to be affected by layoffs, too. We should get more information about the cancellations and exact job losses in the coming days.