Over the last week or so, if you had been browsing any sort of gaming or tech news, you knew the Xbox bloodbath was coming—but none of us knew it would hit quite this hard. As part of Microsoft’s latest round of layoffs, which saw a brutal 4% chunk of its workforce, equivalent to 9,000 jobs, vanish into the corporate void, the Xbox division has taken a sledgehammer to its own face. The result? Three games canceled, a studio shuttered, and a lot of people wondering if the Xbox brand even knows what it wants to be anymore.
This is the fourth time within 18 months that layoffs have swept across Microsoft’s gaming division.
Let’s start with the headliner: Perfect Dark is officially dead. Yep, the franchise that was supposed to be Xbox’s grand return to relevance after its announcement at The Game Awards back in 2020. The game had been in development at studio The Initiative—a new team that Microsoft hyped up like it was assembling the video game equivalent of The Avengers. Turns out, it was more like the cast of Ayer’s Suicide Squad. You know, the shitty one we all hated. So yes, Perfect Dark is dead, and so is the studio that was putting it together.
In an internal memo, Xbox’s Matt Booty (hilarious name) delivered the standard corporate eulogy: “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.” Translation: “We don’t care about your livelihood or the fans and the shareholders want some quick returns.” No wonder these corporate assholes lost the console wars.
And that’s not all. Microsoft is also breaking up with Tomb Raider developer Crystal Dynamics, who were helping bring Perfect Dark back to life. Apparently, even a development tag-team couldn’t revive Joanna Dark from her long nap.
Now, while Perfect Dark was always more of a vague promise than a fully realized product (seriously, we saw more Bigfoot footage than gameplay), this still stings. Xbox fans were clinging to it and Fable as the shiny hopes of a first-party revival. But now it’s just Fable left standing—unless it mysteriously falls out the window or commits suicide by taking two bullets in the back of the head later this week.
Unfortunately, the cancellation spree didn’t stop there. Rare’s new IP Everwild—which was never even shown off in any meaningful way—has been euthanized before it could finish whatever nature-spirit PowerPoint it was working on. Also getting the axe? A mysterious MMORPG project from ZeniMax, the same studio behind The Elder Scrolls Online, because apparently “ambition” is now a fireable offense.
The total number of layoffs accompanying these creative executions hasn’t been confirmed yet, but signs point to thousands, and not just in departments tied to the canceled games. The axe is swinging wide and indiscriminately.
And let’s not forget the larger Xbox identity crisis hanging over all of this like a dark cloud made of Game Pass subscription prompts. With console sales reportedly in decline and nearly every big Xbox exclusive being ported to PlayStation faster than Phil Spencer can say “cloud gaming,” Microsoft seems to be redefining the Xbox brand as something that sort of exists everywhere and nowhere all at once. It’s like Schrödinger’s console.
Who knows what other games, studios, or entire creative pipelines will be left bleeding out by the end of the day? With roughly 9,000 or more job cuts across Microsoft, Xbox is just a slice of the carnage—but it’s a very loud, very public slice.
Stay tuned, because apparently every hour brings a new update in Microsoft’s “What If We Just Cancel Everything” initiative.
