It isn’t difficult to argue that Microsoft has remained to have a continuous downhill slope in recent news the past handful of weeks. Despite ramping up its slew of titles for multiplatform release like Gears of War: Reloaded, other titles have fallen from its line of layoffs internally. Probably the most notable to point out is the Perfect Dark reboot at The Initiative that was shuttered alongside the Santa Monica studio.

Additionally, Forza Motorsport was effectively put unto its deathbed. It was revealed that developer Turn 10 Studios was drastically reduced in staffing and the core franchise was also shelved in an effort to further assist the spin-off Forza Horizon series instead with Playground Games. Even Rare was met with the closure of its long-awaited Everwild project that was met with the exit of decade-long veterans at the developer as well.

Not to mention the uncertainty internally at Romero Games with Xbox (probably) being what funded the team left a looming cloud over the Irish game studio too. Amid the news back in June, a new development has surfaced this week connected to the string of changes at Xbox. From Jason Schreier, the 2021-announced Contraband from Avalanche Games is now being shelved alongside its other siblings under Xbox Game Studios. 

BREAKING: Xbox is canceling Contraband, announced in 2021 from Avalanche Studios (Just Cause), after four years of radio silence, sources tell Bloomberg News. This news arrives weeks after a mass layoff in which Xbox canceled several other big titles.

Jason Schreier (@jasonschreier.bsky.social) 2025-08-07T16:56:53.915Z

At the initial reveal for Contraband, game director Omar Shakir explains it to being “a co-op smuggler’s paradise set in the fictional world of 1970s Bayan, and our most ambitious and spectacular game to date. […] To fully deliver on our vision for Contraband, we have an amazing team at Avalanche Studios that are pushing the boundaries with the next generation of our Apex Engine, the technology behind all our games.”

And while another project falls through the cracks of this firing fallout at Microsoft, one thing that isn’t happening anytime soon is the exit from Phil Spencer. It was revealed through discourse online that claims of Spencer’s retirement is not on the table at Microsoft Gaming. You can read the full report by heading here.

Are you surprised by this new development for another Xbox Game Studios title?

Nick Moreno Content Writer

Nick has over a decade of video game journalism under his belt. Outside of writing about trending & indie releases, he has also provided coverage at multiple events across the United States including Penny Arcade Expo & E3.

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