If you’ve been following the news at all this week, you’ve likely heard that Microsoft began some massive layoffs on July 2, especially impacting their gaming divisions at Xbox. The impact of these layoffs have been enormous, first and foremost on the staff whose livelihoods were affected by the reckless cuts to their jobs, but also to a lot of Xbox’s upcoming release schedule.
With 4% of Microsoft’s global staff cut, many Xbox games have experienced either cancellation or had the teams working on them slashed. We’ve been following the news and researching these jobs and teams affected to bring you a complete list of which projects have been impacted by Microsoft’s layoffs. Before we begin, we’d like to extend our deepest sympathies to those affected by the cuts across Microsoft regardless of division, and we hope all former staff are able to find safe employment opportunities elsewhere.
Perfect Dark: cancelled
Perhaps the most surprising game loss from Microsoft’s cuts was the cancellation of Perfect Dark. A reboot of the 2000s first-person shooter series by Rare, Perfect Dark was in active co-development between new Microsoft studio The Initiative and Crystal Dynamics, known for their work on the Tomb Raider series.
As part of their gaming cuts, Microsoft has closed down the entire The Initiative studio, and with it saw the cancellation of Perfect Dark. Microsoft had formerly pitched the studio as being “AAAA”, promising an extremely high budget and high quality release. The cancellation however sees the loss of a game over five years in development, along with an entire talented development team and even a loss of opportunity for the voice acting cast.
Zenimax Untitled MMORPG: cancelled
An untitled MMORPG from Zenimax Online Studios, known for their Elder Scrolls Online work, has been completely axed following the layoffs. The untitled project had been in development for seven years, with staff reportedly being shocked by its cancellation given how well it was performing internally, and due to development scaling up nicely. According to a Bloomberg report, the game was so good that Xbox CEO Phil Spencer had to have the controller taken away from him during a demonstration meeting. Despite this, the game was still axed.
It’s unknown exactly how many staff members at Zenimax were affected by the layoffs, and if this will have any potential impact on the existing Elder Scrolls Online. For now though, we do know that a lot of talented staff members and an entire promising game were lost thanks to Microsoft’s cuts.
Call of Duty: impacted
Whilst there has been no confirmation that Call of Duty has been directly affected in any way, many studios that support titles in the franchise have seen staff cuts. Raven Software co-developed both last year’s Black Ops 6 and the upcoming Black Ops 7, along with working on Warzone, and they have been victim to layoffs also.
Additionally, both High Moon and Sledgehammer Games have both been affected by the Microsoft cuts, with both studios being active contributors to the Call of Duty franchise and its games. Sledgehammer is known most notably for their work on the Modern Warfare series, and were actively working on future projects as the cuts are taking place. It’s worth noting in the conversation around layoffs that Call of Duty is a franchise that has actively supported the use of AI artwork in its most recent title.
Forza Motorsport: shuttered
Team 10, the developers of Forza Motorsport, were hit particularly hard by the layoffs over the past week. Reports initially suggested that up to half of its roles were cut, but today we got an additional update from a former employee on a now restricted Facebook post. The employee says that the team “is no more”, and that Forza Motorsport has been shuttered. For their personal account privacy, we will not be sourcing this comment publicly.
Going forwards, this former employee suggests that what remains of Team 10 will become a support studio, contributing towards the ongoing Forza Horizon series instead. Motorsport specialized in being a realistic track racing simulator, compared to the more relaxed and open-world approach of Horizon.
Everwild: cancelled
An entire action–adventure game from the iconic Rare studio has been cancelled by Microsoft amidst the layoffs. With more than a decade of work being put into Everwild, which was reportedly going well just last year, Microsoft decided to end the development of the game effective immediately.
A broader restructuring of Rare is also ongoing, which has come with job losses for the team best known currently for their work on Sea of Thieves, but historically as the studio behind Banjo-Kazooie and Donkey Kong Country. Amidst the layoffs, Gregg Mayles has finally left the studio after 35 years, who himself was heavily influential in its earlier years as the director of the legendary Banjo-Kazooie games and Viva Piñata.
Warcraft Rumble: impacted
As the layoffs took place, Blizzard released an announcement that Warcraft Rumble will no longer be receiving additional new content, as its employees reportedly are experiencing both role shifts and losses.
Going forwards, Warcraft Rumble will offer regular in-game events and bug fixes, but will no longer offer new content to players. Despite only launching two years ago, Blizzard found that Rumble had “struggled to find its footing” despite their goals of “long-term success”, and ultimately have determined that the future is unsustainable.
Halo: impacted
Formerly known as 343 Industries, the team at Halo Studios have also been affected by Microsoft’s massive layoffs. Reportedly, only a few jobs were cut, but tensions within the studio have made some staff uncomfortable, with some even trying to “rally folks to jump ship”, according to Engadget.
Halo Infinite fell short of expectations for both fans and internally for Microsoft, and they plan on sharing more details about the future of the franchise later this year. The rebrand of the company to ‘Halo Studios’ is part of their grand future plans to reinvigorate interest in the series, but we’ll see as time passes how these layoffs and morale impacts the studio.
Untitled “Romero” Game: cancelled
Romero Games was an independent game studio, led by John and Brenda Romero, a husband and wife duo known for their work on Doom and Wizardry respectively. Together, they were using their decades of expertise to create a brand new first-person shooter IP in Unreal Engine 5. Whilst their publishing partner was previously unknown, we now know it was Microsoft.
With Microsoft removing all funding to the independent studio’s project they’d been working on for the gaming giant for over three years, Romero Games has actually now been forced to shut down. Microsoft’s cuts even managed to sabotage an independent studio, which is incredibly unfortunate for the Romero Games staff.
[Rumored] Banjo-Kazooie: cancelled
This is the only section that’s based entirely on unconfirmed sources, so take this with a hefty grain of salt. Back in 2023, the somewhat reliable NateDrake insider over on ResetEra said he’d heard of an active Banjo-Kazooie project in development. However, on the day of the layoffs, he stated there had been no update “in a while”, and they assume that at this point it has been shelved.
Whilst we cannot say that anything Banjo-Kazooie related has been cancelled, the director or the original game did just leave Rare after 35 years at the company, and fellow Rare franchise Perfect Dark also got its high profile cancellation of its reboot despite such anticipation. We wouldn’t say it’s entirely unlikely that there could’ve been a Banjo-Kazooie game of some kind in development at some point, but it now seems totally unlikely that we’ll see such a game any time soon.
And that’s the complete list of games that have been directly affected by Microsoft’s layoffs across their gaming division. This list could be updated should more details be made public. Again, our thoughts go out to those targeted by these devastating job cuts. For more, keep your eyes on GameLuster with our high quality gaming news and coverage.
