Xbox Layoffs Rock Gaming Industry as Perfect Dark and Everwild Get Cancelled

Microsoft’s gaming division is facing a massive shake-up, and fans of Xbox exclusives are feeling the impact. As part of a broader company-wide reduction of around 9,000 employees, the tech giant has cancelled two highly anticipated titles: Perfect Dark and Everwild. Both games were in active development and had been showcased as part of Xbox’s next-gen strategy.

Xbox Studio Layoffs Hit The Initiative and Rare

The fallout from the layoffs has hit The Initiative especially hard. The studio, originally created to reboot the classic Perfect Dark franchise, has now been shut down. This closure effectively ends the development of the game, which had been generating buzz since its reveal trailer premiered in 2020.

At the same time, Rare’s open-world adventure title Everwild has also been scrapped. Though details about Everwild were sparse, the game had been building anticipation due to Rare’s legacy and the game’s lush art direction. With both projects shelved, fans are expressing disappointment across social media and gaming forums.

Blackbird and Other Xbox Titles Affected

In addition to Perfect Dark and Everwild, a new MMORPG codenamed Blackbird from ZeniMax has reportedly been cancelled. While Blackbird had not been officially announced, insiders confirm that the title was quietly in early development.

Despite these setbacks, Microsoft still claims to have more than 40 titles in active development. These include first-party releases and major partnerships that are expected to drive momentum into 2026. The company remains optimistic, pointing to strong upcoming releases as signs of recovery.

What’s Next for Microsoft and Xbox?

Microsoft has pledged severance packages and support to impacted employees and has encouraged internal transfers across Xbox Game Studios. For fans and industry watchers, the question now becomes whether Xbox can bounce back from this blow and refocus its development slate effectively.

While the layoffs are unfortunate, they underscore the volatile nature of AAA game development in 2025. As expectations grow and market pressure intensifies, even iconic franchises like Perfect Dark aren’t immune from cancellation.

Outlook for Xbox’s 2026 Game Lineup

With Xbox’s 2026 game lineup still shaping up, Microsoft’s ability to rebuild trust with its player base may hinge on delivering quality across fewer but more polished titles. The decision to cancel beloved properties has rattled long-time fans, but the company’s future now rests on how well it executes its upcoming projects.