Microsoft is closing the studio developing the Perfect Dark reboot and cancelling the game

The Initiative, the Xbox studio developing a modern reimagining of Perfect Dark, is being shut down, and development of the game is ending. As first reported by Windows Central, the studio’s closure is part of major cuts Microsoft is making across its business, affecting around four percent of the company’s global workforce.

Based on a memo from Xbox Game Studios head Matt Booty obtained by Windows Central, which Microsoft has confirmed is genuine, the decision to close The Initiative was born out of the cancellation of Perfect Dark, rather than the other way around. “We have made the decision to stop development of Perfect Dark and Everwild as well as wind down several unannounced projects across our portfolio,” Booty wrote. “As part of this, we are closing one of our studios, The Initiative.”

Rare’s Everwild was previously reported to be one of the projects impacted by Microsoft’s layoffs. The game was announced in 2019 but has had a troubled development, even starting from scratch in 2021. Perfect Dark, based on the older Rare game of the same name, was supposed to be The Initiative’s first project. The game was being co-developed in partnership with Crystal Dynamics. The first gameplay footage of the Perfect Dark reboot was shown in 2024.

While cancelled games are the most visible impact of Microsoft’s layoffs, it increasingly sounds like countless studios will end up being affected in one way or another. Bloomberg’s Jason Schreier writes that Call of Duty studio Raven is also facing cuts, and Forza Motorsport developer Turn 10 could end up losing around 50 percent of its staff.