Yesterday’s layoffs at Microsoft’s gaming division has claimed another major casualty: the highly anticipated Perfect Dark reboot is no longer in development, and the studio behind it, The Initiative, has been shut down. The cancellations come amid Microsoft’s decision to cut approximately 9,000 jobs—roughly 4% of its global workforce—impacting numerous Xbox studios and projects.
First announced in 2020 and reintroduced with a well-received gameplay trailer in 2024, the Perfect Dark reboot was envisioned as a modern, eco-sci-fi revival of the classic stealth-shooter franchise starring Joanna Dark. The game was being co-developed by The Initiative and Crystal Dynamics, with plans for an eventual release on Xbox Series X|S and PC. According to a report from The Verge, the project struggled behind the scenes, with internal turnover, creative resets, and mounting uncertainty. Those struggles have now culminated in Microsoft officially pulling the plug.
The closure of The Initiative follows an internal email from Matt Booty, head of Xbox Game Studios, who confirmed the studio’s shutdown and the project’s cancellation as part of the broader restructuring. While Booty emphasized that Microsoft remains committed to its highest-priority franchises and still has over 40 projects in development, the fallout from these decisions has been widespread. Affected employees are being offered severance packages, career transition support, and priority consideration for other open roles within Microsoft Gaming.
The Perfect Dark reboot isn’t the only game caught in this wave of cancellations. Microsoft has also reportedly scrapped Rare’s Everwild and ZeniMax’s unannounced MMO project “Blackbird”, adding to a growing list of shelved titles. These moves follow previous studio closures, including Arkane Austin and Tango Gameworks, as Microsoft continues to consolidate its portfolio post-acquisitions. You can read more about the broader impact of these layoffs in our detailed report here.
The end of Perfect Dark is particularly disappointing for Xbox fans who were eager to see the return of one of the platform’s cult-classic franchises. The 2024 gameplay reveal drew praise for its atmosphere, stealth mechanics, and striking visual design. PC Gamer called it “something special” at the time, and for many, it represented a renewed effort by Xbox to invest in big-budget, narrative-driven exclusives. But with The Initiative shuttered and the project abandoned, those ambitions appear to have been scaled back.
For now, Microsoft’s public stance is that the company is streamlining to focus on the projects with the strongest commercial and creative potential. Over 40 games are reportedly still in development across Xbox Game Studios, and Microsoft maintains that new content is still on the horizon. Yet the simultaneous loss of Perfect Dark, Everwild, and other projects paints a picture of a publisher becoming far more risk-averse when it comes to big, unproven franchises.
For fans of stealth games, sci-fi worlds, and beloved Xbox legacies, this one stings. Whether Joanna Dark will ever make a return in the future is anyone’s guess. For now, though, it’s another hard reset in what has become an increasingly turbulent period for Microsoft’s gaming division.
