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Xbox's "AAAA" Perfect Dark Reboot Canceled, Developer Shutting Down

Xbox's Perfect Dark reboot, first announced in 2022, has been canceled. Its developer, The Initiative, is also shutting down, Microsoft has confirmed.

First reported by Windows Central and corroborated by Bloomberg reporter Jason Schreier, the cancellation of Perfect Dark and closing of The Initiative come as part of Microsoft's latest round of layoffs, which are affecting an estimated 4% of the company's workforce. That translates to around 9,000 people losing their jobs, many of them across Microsoft's various gaming studios.

The Initiative was formed in 2018 and based in Santa Monica. Billed as a "AAAA" studio, it was led by former Crystal Dynamics studio head Darrel Gallagher and made up of developers from Respawn, BioWare, Naughty Dog, and more. In 2021, The Initiative announced it would partner with Crystal Dynamics, developer of the most recent Tomb Raider games, to assist on the Perfect Dark reboot.

Players got their first look at Perfect Dark gameplay in 2024 as part of that year's Xbox Games Showcase. The trailer showed Perfect Dark to be a first-person shooter with immersive sim elements, as series protagonist Joanna Dark used gadgets, stealth, and melee takedowns to complete her objectives, all the while hinting at a greater conspiracy for players to uncover. Despite the gameplay showcase, Perfect Dark did not ever receive a release window.

A report from shortly before the debut of Perfect Dark's gameplay trailer stated the reboot of the spy FPS was in bad shape and that the project hadn't "really come together" despite Crystal Dynamics being brought in to help development.

Perfect Dark and The Initiative are just a few of the games and studios to be affected by this new wave of layoffs at Microsoft. While at the time of writing The Initiative is the only studio closure announced, other studios like The Elder Scrolls Online developer ZeniMax Online, Blizzard, Forza developer Turn 10 and even Call of Duty Black Ops 7 developer Raven Software have also seen layoffs.

Xbox Game Studios head Matt Booty in an internal email shared by Windows Central confirmed Perfect Dark, Rare's Everwild, and several other unannounced projects, one of which is reported to be ZeniMax Online's next MMORPG, have all been canceled as part of the layoffs.

"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 writes in the email. "As part of this, we are closing one of our studios, The Initiative. These decisions, along with other changes across our teams, reflect a broader effort to adjust priorities and focus resources to set up our teams for greater success within a changing industry landscape. We did not make these choices lightly, as each project and team represent years of effort, imagination, and commitment."

It's just the latest round of layoffs for Microsoft in recent years. In 2023, Microsoft laid off an estimated 10,000 people. Following its acquisition of Activision Blizzard, Microsoft laid off an estimated 1,900 employees in 2024. That same year it shut down four Bethesda studios, including Arkane Austin and Tango Gameworks.