Microsoft confirmed on Wednesday (2) the cancellation of the Perfect Dark reboot and the closure of The Initiative studio, responsible for the project. The decision is part of a new phase of restructuring of the company's gaming division, which aims to redirect investments and optimize resources in an increasingly competitive market.
The announcement was revealed in an internal email sent to employees by Matt Booty, head of Xbox Game Studios, and reported on Windows Central. In addition to Perfect Dark, other unannounced titles were also shut down, including the Everwild project.
Project reduction is part of a global strategy
According to the internal statement, the decision is in line with a strategic move to reduce risk and focus efforts on the highest-return franchises. Thus, the closure of The Initiative studio represents the end of a team that was founded with the mission of creating innovative games under the Xbox umbrella.
According to Booty, more than 40 titles remain in active development, and the company plans to bolster its catalog with releases scheduled for the second half of 2025 and the following year. Despite this, the cuts in projects and studios signal a period of instability even among established companies in the industry.
The email also highlighted Microsoft's commitment to employees affected by the decision. The company claims to be offering appropriate severance packages, career transition support, and internal opportunities in other teams to minimize the impact of the layoffs.
"Each project and team represents years of effort, imagination, and commitment. These decisions were not made lightly ," Booty said.
A significant loss for the gaming community
Microsoft announced the Perfect Dark reboot in 2020, sparking high expectations, especially for reviving a classic franchise from the Nintendo 64 era. Furthermore, the new project aimed to introduce a reimagined agent Joanna Dark in a modern universe, with a deeper narrative and a focus on stealth action.
The game's closure leaves the fate of the franchise, which hasn't seen a new installment in years, up in the air. Thus, the partnership with Crystal Dynamics, the studio known for Tomb Raider, will also be discontinued.
The trend of cuts continues in the gaming sector
The closure of The Initiative and the end of the Perfect Dark project add to a long list of layoffs and restructurings. Companies like Sony, Ubisoft, Epic Games, and Microsoft had already implemented significant cuts in 2024 and 2025.
In 2024 alone, Microsoft laid off more than 9,000 employees across various divisions. This reflects a forced adaptation to the new industry landscape, which is facing rising production costs and changing consumer behavior.
