Microsoft has officially halted development on Contraband, a co-op multiplayer game being created by Avalanche Studios, known for the Just Cause series. The title, which was slated for publication by Xbox Game Studios, was announced in 2021. However, there have been no updates from the developer since its unveiling. Contraband is among a series of project cancellations at Microsoft, though the company has confirmed that Hideo Kojima’s horror game, OD, continues to be in development with Xbox.
Contraband Development Ceases
The cancellation of Contraband was first reported by Bloomberg’s Jason Schreier on Thursday and later verified by Avalanche Studios. In an announcement on their website, the studio expressed that it would be evaluating the game’s direction moving forward.
“Over the past several years, Avalanche Studios Group and Xbox Game Studios Publishing have collaborated on Contraband,” the studio stated. “Active development has now stopped while we evaluate the project’s future. We’re thankful for the excitement we’ve seen from the community since we announced it and will provide updates on what’s next as soon as we can.”
While the statement leaves the door open for potential future development, Schreier suggested in a post on Bluesky that the project had indeed been cancelled. Contraband was introduced with a brief cinematic trailer during the Xbox and Bethesda E3 showcase in 2021, characterized as a “co-op smuggler’s paradise set in the fictional world of 1970s Bayan.” The game was planned as an exclusive for Xbox Series S/X with confirmed availability on Xbox Game Pass, Steam, and Windows.
OD from Hideo Kojima Remains in Progress
As concerns grow regarding Xbox’s project portfolio, fans have been eager to learn about the status of OD, a horror game being developed by Kojima Productions in partnership with Xbox Game Studios. A spokesperson from Microsoft, however, reassured Schreier that OD is still progressing, although no additional information has been disclosed.
The latest cancellation follows significant layoffs at Microsoft, where nearly four percent of the workforce—over 9,000 employees—lost their jobs. This streamlining effort resulted in the cancellation of several Xbox projects, including the Perfect Dark reboot, Rare’s Everwild, and an as-yet-unannounced MMO from ZeniMax Online Studios, the developers behind The Elder Scrolls Online.
Other studios under Xbox, such as King, known for Candy Crush, as well as Raven Software and Sledgehammer Games from the Call of Duty franchise, along with Halo Studios and Forza Motorsport developer Turn10 Studios, also faced layoffs. Reports indicate the entire Forza Motorsport team was let go.
These workforce reductions occurred despite Microsoft’s strong financial performance, recently achieving a market valuation of $4 trillion (approximately Rs. 3,49,15,020 crore), becoming only the second company in history to do so. In the fourth-quarter FY 2025 earnings call, CEO Satya Nadella noted that Xbox Game Pass annual revenues reached nearly $5 billion for the first time in the past year, with a ten percent growth in gaming revenue and a 13 percent rise in Xbox content and services revenue during FY 2025.