Xbox studio The Initiative has been shut down amid the latest wave of Microsoft layoffs, killing the troubled Perfect Dark reboot along with it.
According to IGN’s sources, over 9,000 staff at Microsoft are set to lose their jobs. Apart from The Initiative, sources also state that beloved British studio Rare has also seen a hit to personnel, with its long-in-development title Everwild being cancelled as a result. Additionally, Bethesda’s London office, as well as Candy Crush studio King, have also been affected by the layoffs.
This unfortunate news comes via a series of memos sent to Microsoft gaming staff, the first of which was from Xbox boss Phil Spencer, which read:
Today we are sharing decisions that will impact colleagues across our organization. To position Gaming for enduring success and allow us to focus on strategic growth areas, we will end or decrease work in certain areas of the business and follow Microsoft’s lead in removing layers of management to increase agility and effectiveness. Out of respect for those impacted today, the specifics of today’s notifications and any organizational shifts will be shared by your team leaders in the coming days.
While Spencer’s message did not include specific details on which studios and staff were affected, a follow-up memo by head of Xbox Game Studios Matt Booty confirmed the cancellation of Perfect Dark and Everwild, and the shuttering of The Initiative, writing:
Following Phil’s note, I want to share more about the changes to the Studios business units. We have made the decision to stop development of Perfect Dark and Everwild as well as wind down several unannounced projects across our portfolio. As part of this, we are closing one of our studios, The Initiative. 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. We did not make these choices lightly, as each project and team represent years of effort, imagination, and commitment.
Perfect Dark originally released in 2000 for the Nintendo 64 and was a first-person shooter centred on agent Joanna Dark as she attempts to stop an extraterrestrial conspiracy. The Initiative, a studio formed by Xbox in 2018, was working on a modern reboot together with Tomb Raider developer Crystal Dynamics.
The first trailer for the Perfect Dark reboot was subsequently released in 2024 during the Xbox Showcase, featuring a sneak peek at gameplay, which featured a mix of slick traversal and first-person combat, alongside the reveal of returning protagonist Dark. The doomed project would then go radio silent, with a notable absence at this year’s Xbox Showcase in June.
It seems Microsoft is on a warpath as of late, making a huge number of cuts to its gaming teams since 2024, including laying off 1,900 staff in January that year, followed by the closing of developers Tango Gameworks and Arkane Austin in May. Prior to the current layoffs, the most recent staff cuts occurred in May this year, when Microsoft let go of approximately 6,000 staff, amounting to 3% of its entire workforce.
Kevin is a reformed PC Master Race gamer with a penchant for franchise “duds” like Darksiders III and Dead Space 3. He has made it his life-long mission to play every single major game release – lest his wallet dies trying.
