Microsoft Cancels Perfect Dark and Closes Developer The Initiative
Microsoft has made significant cuts to its gaming division, including the cancellation of the highly anticipated Perfect Dark reboot and the closure of its first-party studio, The Initiative. This decision is part of a broader wave of layoffs affecting over 9,000 employees across the company, with the Xbox division bearing a substantial brunt. The layoffs have also impacted other notable studios, including Rare and ZeniMax Online Studios, leading to the cancellation of several projects, including the action-adventure title Everwild.
Microsoft Job Cuts Impact Xbox Division
The recent layoffs mark the fourth round of job cuts within Microsoft’s gaming division since the beginning of 2024. These cuts follow the company’s acquisition of Activision Blizzard in October 2023, a deal valued at over $69 billion. As part of its restructuring efforts, Microsoft plans to reduce its workforce by nearly four percent, which translates to more than 9,000 employees.
The layoffs have particularly affected the Xbox division, impacting several key studios. Reports indicate that King, the developer behind Candy Crush, is reducing its workforce by approximately 10 percent, which amounts to around 200 employees. Other studios, including Raven Software, Sledgehammer Games, and Turn10 Studios, have also faced cuts, although the exact number of affected employees remains unclear. This wave of layoffs reflects Microsoft’s ongoing efforts to streamline operations and adapt to the evolving gaming landscape.
Perfect Dark, Other Projects Cancelled
The cancellation of the Perfect Dark reboot has disappointed many fans. Initially revealed at The Game Awards in 2020, the game was being developed by The Initiative in collaboration with Crystal Dynamics, known for their work on the Tomb Raider series. A gameplay trailer was showcased at the Xbox Games Showcase last year, but the game was notably absent from this year’s event, raising concerns about its future.
In an internal email, Matt Booty, head of Xbox Game Studios, confirmed the cancellation of Perfect Dark and Everwild, along with several other unannounced projects. He emphasized that these decisions were not made lightly, as they involved years of dedication and creativity from the teams involved. Booty reassured staff that Xbox’s overall strategy would remain intact, with a focus on continuing to develop its most significant franchises. He also mentioned that affected employees would receive severance packages and assistance in finding new roles within the company.
Xbox Cuts and Change in Strategy
The layoffs at Xbox have become increasingly frequent since Microsoft completed its acquisition of Activision. In January 2024, the company laid off over 1,900 employees, representing about eight percent of its gaming division workforce. This trend continued with the closure of three Bethesda-owned studios in May 2024, leading to significant layoffs as Microsoft shifted its focus to priority games.
In September 2024, Microsoft announced further layoffs, affecting 650 employees in the Xbox division as part of cost-cutting measures following the Activision acquisition. The company has also shifted its core strategy away from traditional home consoles, prioritizing services like Game Pass and cloud gaming. This includes releasing first-party Xbox exclusives on rival platforms, such as Sony’s PS5, a move that reflects a significant strategic pivot for the company.
Despite these changes, Microsoft remains committed to the hardware business. Recently, the company announced a multi-year agreement with AMD to co-develop chips for future devices, including next-generation Xbox consoles. Microsoft aims to ensure that its next-gen gaming experience is accessible across various platforms, reinforcing its goal of making Windows the leading platform for gaming.
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