Microsoft is canceling its Perfect Dark and Everwild games as part of sweeping cuts to its Xbox division. Matt Booty, Xbox president of game content and studios, revealed that Microsoft will be closing The Initiative, the studio behind Perfect Dark, in an internal memo to Xbox employees today.

The cuts are part of layoffs affecting around 9,000 employees across Microsoft, with Turn 10 Studios, the developer behind Forza Motorsport, also hit hard by today’s layoffs.

Here is Booty’s memo to staff:

Following Phil’s note, I want to share more about the changes to the Studios business units.

We have made the decision to stop development of Perfect Dark and Everwild as well as wind down several unannounced projects across our portfolio. 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.

Our overall portfolio strategy is unchanged: build games that excite our players, continue to grow our biggest franchises, and create new stories, worlds, and characters. We have more than 40 projects in active development, continued momentum on titles shipping this fall, and a strong slate headed into 2026.

For those directly affected, we are working closely with HR and studio leadership to provide support, including severance, career transition assistance, and where possible, opportunities to explore roles on other teams.

To everyone across our studios: thank you. Your creativity and resilience continue to define who we are. I believe in the strength of our teams and the direction we’re taking on the path ahead.

Matt