So much for the return of Joanna Dark.

Amidst the recent Microsoft Games mass layoff comes this big casualty: The Initiative. The Santa Monica-based studio is shut down and cancels its upcoming first-person shooter Perfect Dark reboot. This is according to a Windows Central report.

The Perfect Dark reboot has been floating around for 7 years in development, with the game announced in December 2020. In addition, the Initiative’s partnership with Crystal Dynamics has also ended, since there’s no more studio left to team up with.

Here’s the full email from Xbox Games Studio head Matt Booty:

“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.”

 

Is Xbox Truly Cooked?

They’ll still be around, but not completely like their former first-party gaming selves. Unless the company has a few other noteworthy projects under their belt that isn’t Halo, Gears of War, or Forza, for 2026 and beyond, they’re going to languish in third-party gaming purgatory as they’ve always been for the past year or so. Even Xbox-pilled supporters like Jez Corden (the person who made the earlier Windows Central report) have accepted this fact.

Also, to have a game like Perfect Dark in a 7-year development is pretty insane given that (a) there are two games in the series that they already have a framework to build around and (b) it shouldn’t be hard to have game devs make a first-person espionage-styled shooter with fun setpieces unless there was a lot of producer and executive meddling. We’re guessing the latter has happened to the point where The Initiative couldn’t handle it.

There is also the current trend in gaming where players are just investing in existing titles like Fortnite, Roblox, and most of HoYoverse’s portfolio (Genshin Impact, Honkai Star Rail, Zenless Zone Zero). Here’s a quote from an Early Game article that hints at this. 

“The gaming industry is facing a significant shift in how players purchase games, with nearly 30% of gamers expected to buy no new games in 2025. […]Titles like Fortnite, GTA Online, and Roblox now take up approximately 40% of players’ total gaming hours.”