Microsoft has halted development on Contraband, a multiplayer cooperative game from Just Cause developer Avalanche Studios. The game was originally announced for release by Xbox Game Studios in 2021, but the developer has yet to share any updates since its launch. While Microsoft has canceled a slew of games, the company has reportedly not canceled Hideo Kojima’s horror game OD, which is currently being developed in partnership with Xbox.
Microsoft removes contraband
Contraband’s cancellation was first reported by Bloomberg’s Jason Schreier on Thursday and later confirmed by Avalanche. The Swedish studio said in an update on its website that it will evaluate the future of the game.
“Avalanche Studios Group and Xbox Game Studios Publishing have collaborated on Contraband over the past few years,” the developer said. “Active development has now ceased while we evaluate the future of the project. We appreciate the excitement the community has shown since we made this announcement and will provide an update as soon as possible on next steps.”
While the statement hinted that the game might still have a future, Schreier posted on Bluesky that the project had been cancelled. Contraband released a short cinematic trailer at Xbox and Bethesda’s E3 2021 event. The game is described as “a cooperative smuggler’s paradise set in the fictional world of Bayan in the 1970s. Contraband will be an Xbox Series S/X console exclusive and is confirmed for release on Xbox Game Pass, Steam, and Windows.
Hideo Kojima’s OD is still in development
Amid multiple Xbox cancellations, fans have speculated about the fate of OD, a horror game developed by Kojima Productions and with Xbox Game Studios as publishing partner. However, a Microsoft spokesperson told Schreier that OD is still under development. No further details about the project are available at this time.
The latest Xbox cancellation comes a month after widespread layoffs at Microsoft, which saw nearly 4% of its workforce — more than 9,000 employees — laid off. The layoffs have led to the Xbox division canceling multiple projects, including the Perfect Dark reboot, Rare’s Everwild and an unannounced MMO from The Elder Scrolls Online developer ZeniMax Online Studios.
Several other studios on Xbox, including Candy Crush developer King, Call of Duty developers Raven Software and Sledgehammer Games, Halo Studios and Forza Motorsport developer Turn10 Studios, have also been hit by layoffs. The entire Forza Motorsport team has reportedly been fired.
The cut comes despite Microsoft’s strong quarterly results, which recently hit a market valuation of $4 trillion (roughly Rs. 3,491,502 crore) – only the second company in history to reach this level. During the fiscal 2025 fourth quarter earnings call last week, Microsoft CEO Satya Nadella announced that Xbox Game Pass annual revenue reached nearly $5 billion for the first time in the past year. In fiscal 2025, the tech giant’s gaming revenue grew 10%, while Xbox content and services revenue grew 13%.