Microsoft's gaming head, Matt Booty, affirms ongoing strategy for the overall portfolio, encompassing over 40 games currently in development.
In a significant move to adjust priorities and focus resources within the rapidly changing gaming industry, Microsoft Gaming studios have announced the cancellation of several unannounced projects and the closure of one of their studios, The Initiative, known for its work on the reboot of Perfect Dark. This decision forms part of a broader restructuring effort aimed at navigating the evolving landscape of the gaming world [1][2].
Among the projects that have been axed is Rare’s Everwild, a title that had been in development for over a decade, but failed to find a clear direction. Another casualty is an unannounced MMO codenamed Blackbird from ZeniMax Online Studios, developers of The Elder Scrolls Online. This MMO was a new IP unrelated to existing Bethesda franchises [1][2][3].
The cancellations, while significant, do not signal the end of new content for Xbox. In fact, Microsoft Gaming studios remain actively engaged in the development of over 40 projects, with a strong slate of games planned for 2026 [1][2]. Some of the announced games in production include Marvel's Blade, developed by Arkane Lyon, State of Decay 3, developed by Undead Labs, and an experimental horror title from Kojima Productions. The Xbox publishing team is also working on an unspecified game [1].
The overall portfolio strategy of Microsoft Gaming studios is to build games that excite players, continue to grow their biggest franchises, and create new stories, worlds, and characters. This strategy is evident in the list of announced games in production, which also includes the previously mentioned projects [1].
However, it's worth noting that not all projects announced in the June 2023 Xbox Games Showcase are continuing in development. The current status of unannounced Xbox games not featured in the showcase is largely bleak due to the recent layoffs and project cancellations announced in mid-2025. Despite this, every game featured in the showcase, such as Double Fine's Keeper and inXile Entertainment's Clockwork Revolution, is continuing in development [1].
In an internal memo, Xbox Game Studios head Matt Booty emphasised that despite these cuts, the company still aims to deliver new content and grow franchises [1][2]. He did not mention any particular game as a highlight for the company to look forward to shipping, but the continued momentum on titles shipping this fall and the strong slate headed into 2026 suggest that Xbox is confident in its upcoming releases [1].
References: [1] VentureBeat. (2025, June 16). Microsoft cuts 9,000 jobs, shutsters or cancels multiple projects, including Everwild and Perfect Dark. VentureBeat. https://venturebeat.com/2025/06/16/microsoft-cuts-9000-jobs-shuts-down-or-cancels-multiple-projects-including-everwild-and-perfect-dark/ [2] GamesIndustry.biz. (2025, June 16). Microsoft confirms layoffs, studio closures, and project cancellations. GamesIndustry.biz. https://www.gamesindustry.biz/articles/2025-06-16-microsoft-confirms-layoffs-studio-closures-and-project-cancellations [3] PC Gamer. (2025, June 16). Microsoft cancels unannounced MMO Blackbird, confirms studio closures and layoffs. PC Gamer. https://www.pcgamer.com/microsoft-cancels-unannounced-mmo-blackbird-confirms-studio-closures-and-layoffs/
- The gaming industry's rapid change prompts Microsoft Gaming studios to cancel several projects and close The Initiative, resulting in a broader restructuring effort.
- Among the projects that have been terminated is Rare’s Everwild, a title in development for over a decade, and an unannounced MMO codenamed Blackbird from ZeniMax Online Studios.
- Despite the cancellations, Microsoft Gaming studios are actively working on over 40 projects, with titles like Marvel's Blade, State of Decay 3, and an experimental horror title from Kojima Productions planned for 2026.
- Microsoft Gaming studios aim to create games that excite players, grow their biggest franchises, and develop new stories, worlds, and characters.
- Not all projects announced in the June 2023 Xbox Games Showcase are continuing in development due to recent layoffs and project cancellations announced in mid-2025.
- Xbox Game Studios head Matt Booty, in an internal memo, affirmed the company's commitment to delivering new content and growing franchises.
- The financial sector, business world, technology, entertainment, and sports communities are likely closely monitoring the future of Microsoft's gaming division, given these significant changes in priorities and resource allocation.
