Everwild, Perfect Dark Reboot, Zenimax MMORPG Canceled after Microsoft Layoffs

By Bee Wertheimer  |  July 2, 2025 | 4:07pm
Video Games News Microsoft
Everwild, Perfect Dark Reboot, Zenimax MMORPG Canceled after Microsoft Layoffs

Today Microsoft announced that they will be kicking off their new fiscal year by laying off about 9,000 employees, amounting to 4% of the company’s workforce. It’s the third wave of layoffs for Microsoft in as many months, and follows thousands of layoffs from its gaming divisions in 2024. “I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before,” CEO of Microsoft Gaming Phil Spencer wrote in a message to all gaming staff. “Our platform, hardware, and game roadmap have never looked stronger.” 

During their fiscal quarter ending in March, Microsoft revenue increased 13% to $70.1 billion, and net income increased 18% to $25.8 billion.

As a result a number of upcoming games, both announced and unannounced, have been impacted. Among those are the cancellation of Rare’s title Everwild, according to a report from Video Games Chronicle. Everwild had been in development since 2014, and was first announced by Rare in 2019. The project had been led by Donkey Kong Country and Banjo-Kazooie director Gregg Mayles.

Zenimax Online Studios’ new MMORPG code-named Blackbird was also canceled as part of the layoffs, as reported by Jason Schreier. The project had been in development since 2018.

Xbox studio The Initiative has been shut down as well, and their project Perfect Dark canceled, according to a report by Windows Central. The Initiative was founded in 2018 by Darrell Gallagher, former CEO of Crystal Dynamics. Announced in 2020, Perfect Dark was set to be a revival of the 2000 Rare IP, which debuted amid great fanfare with a game for the Nintendo 64. 

Multiple other studios have also been impacted, including Bethesda, Call of Duty developer Raven Software, and Forza studio Turn 10. According to a social media post by Schreier, almost half of Turn 10’s staff was laid off.

 
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