Microsoft has halted development on Contraband, the 1970s-themed smuggling sim from Avalanche Studios, while it “evaluates the project’s future.” The studio hasn’t formally confirmed a cancellation, but the pause comes amid Microsoft’s ongoing restructuring and layoffs that have already affected its Xbox publishing division. Industry sources suggest the game is effectively dead.
Contraband was first revealed during the 2021 Xbox & Bethesda Showcase as a “co-op smuggler’s paradise” set in the fictional world of 1970s Bayan. It was being built on Avalanche’s Apex Engine, best known for powering Just Cause, and promised an open-world filled with daring heists, stylized co-op action, and exotic locations like River Valley and Pirate Tower. It was also planned as a day-one Xbox Game Pass exclusive.
Despite that flashy debut, Contraband never showed gameplay footage, and updates from Avalanche were almost nonexistent. The reveal trailer was quietly made private, and for nearly four years the project remained shrouded in mystery. That radio silence, combined with recent Microsoft cutbacks, set off speculation that the game’s days were numbered.
For Avalanche, the halt means the end—at least for now—of a rare AAA co-op project that could have joined Xbox’s first-party lineup. For players, it’s another high-profile Xbox title that seemed full of potential but never made it past the promise stage, joining the likes of Everwild, Perfect Dark, and ZeniMax’s unannounced MMO in Microsoft’s growing list of stalled or scrapped projects.
