Microsoft canceled Rare's long-awaited game Everwild on Wednesday as the tech giant announced another wave of layoffs affecting up to 9,000 employees across its Xbox division, marking the latest casualty in an industry-wide contraction despite record profits.
The cancellation ends more than a decade of development on the mysterious adventure game, which Rare first announced in 2019 but had been working on since around 2014, according to Video Games Chronicle. The decision came as Xbox boss Phil Spencer informed staff of cuts designed to "position Gaming for enduring success," though he declined to specify which projects would be axed.
The layoffs extend beyond Everwild, with Windows Central reporting that Microsoft also canceled The Initiative's Perfect Dark reboot and a fantasy MMORPG codenamed "Blackbird" from ZeniMax Online Studios1. The Initiative, Microsoft's internal studio, is reportedly being shuttered entirely2.
Bloomberg's Jason Schreier corroborated the Everwild cancellation1, while multiple outlets confirmed that Rare staff would be among those affected by the restructuring34. King, Microsoft's mobile game developer behind Candy Crush, is cutting 10% of its workforce, or roughly 200 employees5.
Spencer's internal memo, obtained by IGN, cited the need to "focus on strategic growth areas" and "remove layers of management to increase agility"6. He acknowledged the timing was jarring given Xbox's current success: "I recognize that these changes come at a time when we have more players, games, and gaming hours than ever before"6.
Everwild's cancellation caps a turbulent development cycle marked by creative uncertainty. The game underwent a complete restart in 2021 under veteran Rare developer Gregg Mayles after its original creative director departed1. Industry sources suggested the project suffered from a lack of clear direction throughout its development2.
As recently as February, Spencer had spoken optimistically about the game's progress, telling reporters "it's nice to see the team with Everwild and the progress that they're making"2.
Wednesday's announcement represents Microsoft's fourth major round of layoffs since early 2023, despite the company reporting $25.8 billion in net profit for its most recent quarter1. The gaming division has been particularly affected, with previous cuts eliminating 1,900 Activision Blizzard employees in 2024 and shuttering four studios including Tango Gameworks1.
The latest cuts underscore a central tension facing the gaming industry: balancing creative ambition with financial discipline even amid periods of unprecedented growth and profitability.
