Microsoft Xbox Shelves Perfect Dark, Forza Motorsport in New Wave of Layoffs

Microsoft’s Xbox division has launched another round of job cuts and project cancellations, extending a two-year restructuring that has eliminated more than 9,000 roles across its gaming business. Internal emails seen by multiple outlets show the company halting development of Rare’s long-gestating fantasy adventure Everwild and shutting down the Perfect Dark reboot at The Initiative. Funding has also been pulled from several unannounced projects, and one studio, The Initiative, will close.

Racing-game specialist Turn 10 Studios is among the hardest hit. Former employees and people familiar with the matter say as much as half of the team was laid off and that the Forza Motorsport series has been shelved, with remaining staff reassigned to support Playground Games’ more commercially successful Forza Horizon franchise.

The cuts cap a grim week for the sector. Stockholm-based mobile developer Toca Boca confirmed an undisclosed number of layoffs tied to “project changes and cost-savings,” while Dying Light maker Techland cancelled two unannounced games but said it reassigned affected developers and avoided redundancies.

Xbox chief Phil Spencer told staff the moves are intended to concentrate resources on the “strongest opportunities” in a volatile market. However, the latest wave underscores the industry’s broader contraction, which has seen mass layoffs at Epic Games, Unity, Riot and other major publishers over the past 18 months.