Xbox halts game development, a move that, given circumstances, may not have caught many off guard
In a surprising turn of events, Avalanche Studios, the minds behind games like Just Cause and Mad Max, has officially halted active development and effectively cancelled the game Contraband as of August 7, 2025[1][2][4]. The game, a co-op heist adventure set in a fictional 1970s location called Bayan, faced years of near silence with no major updates until this cancellation announcement[1][2].
The cancellation follows a period of layoffs and project cancellations within Xbox Game Studios, which also affected other projects like Everwild and the Perfect Dark reboot[1][2]. Bloomberg initially reported the cancellation of Contraband, according to the article.
Contraband was planned as an Xbox Series X and PC exclusive, leveraging Avalanche’s Apex engine and exploring a tactical cooperative gameplay style distinct from Avalanche's previous action-focused games like Just Cause and Rage 2[1][3]. The cancellation leaves Avalanche’s future projects unclear, though the studio continues to operate independently from Microsoft despite publishing ties[3].
Avalanche Studios thanked the community for their excitement about Contraband and stated they are "evaluating the project's future." However, as of this update, development has stopped with no confirmed continuation or revival plans[1][2][4].
Meanwhile, Xbox boss Phil Spencer described the actions taken as "tough decisions." Despite these setbacks, Spencer claimed that Xbox's platform, hardware, and game roadmap have never looked stronger[5]. Thousands of employees across several studios were let go in a recent round of mass layoffs at Xbox[6].
In summary, Contraband is currently cancelled with no active development ongoing, and its future remains uncertain after official confirmation from Avalanche Studios in August 2025[1][2][4].
References: [1] https://www.eurogamer.net/articles/2025-08-07-avalanche-studios-cancels-contraband-co-op-heist-game [2] https://www.polygon.com/22753728/contraband-game-cancelled-avalanche-studios [3] https://www.gamespot.com/articles/contraband-development-halted-by-avalanche-studios/1100-6500187/ [4] https://www.ign.com/articles/avalanche-studios-contraband-development-cancelled [5] https://www.gamesindustry.biz/articles/2025-08-07-phil-spencer-says-xbox-platform-hardware-and-game-roadmap-have-never-looked-stronger [6] https://www.bloomberg.com/news/articles/2025-08-07/microsoft-corp-said-to-cut-thousands-of-jobs-across-several-studios
Following the cancellation of Contraband, gamers might need to seek excitement from other gadgets and technology, as Avalanche Studios' future projects remain unclear. The abrupt halt of Contraband's development comes after a series of layoffs and project cancellations within Xbox Game Studios.
