Players anticipating the release of Contraband, a 1970s-themed cooperative smuggling game, have received disappointing news as Avalanche Studios confirms active development on the title has stopped. The decision follows recent reports of widespread layoffs and multiple project cancellations at Microsoft, affecting not only Contraband but also other games and studios associated with Xbox Game Studios. The ongoing uncertainty has sparked questions about the future directions for both Avalanche Studios and Microsoft’s collaborative projects. Observers note the game’s exclusive tie to Xbox Series S|X consoles and its initial promise as a flagship addition to Xbox Game Pass and PC gaming.
Word of Contraband’s halt comes after Microsoft carried out significant layoffs involving roughly 9,000 staff, raising further concerns around the stability of externally developed projects. When Contraband was first announced at E3 2021, expectations were high due to Avalanche Studios’ reputation from the Just Cause series, yet the project’s progression had remained unclear for years. No substantive gameplay details ever emerged, and the brief teaser primarily set the title’s 1970s smuggler tone. Avalanche has endured earlier disruption, including closing newly acquired studios in North America and laying off a notable portion of its workforce, a sign of ongoing operational challenges. These recent developments highlight a continuation of volatility and unpredictability for the company and its long-term partnerships with larger publishers.
Development on Contraband Paused Pending Further Decisions
Avalanche Studios announced the pause in Contraband’s development, indicating that both Avalanche and Xbox Game Studios Publishing are now reassessing the project’s future. Official communication refrained from specifying which party initiated the halt, but a Bloomberg report and other industry sources attribute the call to Xbox’s publishing division, which was reportedly heavily impacted by Microsoft’s layoffs in July. One studio statement noted,
“Active development has now stopped while we evaluate the project’s future.”
This decision places Contraband in an ambiguous status, fueling speculation about its possible cancellation.
What Led to This Project Uncertainty?
Recent workforce reductions have rippled across Microsoft’s internal gaming units and its collaborations with external studios. Industry analysis links these layoffs directly to numerous cancellations, including Contraband, as well as the closure of developer The Initiative and the nixing of titles such as Rare’s Everwild, the Perfect Dark reboot, and an MMO at ZeniMax Online Studios. The loss of funding also affected studios such as Romero Games, which reportedly lost financial backing for an unannounced shooter around the same timeframe. According to company remarks,
“We’re thankful for the excitement we’ve seen from the community since we announced and will give an update on what’s next as soon as we can.”
The lack of concrete details on Contraband’s future leaves both its developers and prospective players uncertain.
Could Collaborative Game Development Face Higher Risks?
Collaborations between large publishers and independent studios remain susceptible to business decisions affecting overall portfolios. Avalanche’s partnership with Xbox was expected to yield a unique, cooperative gameplay experience set in the fictional world of 1970s Bayan, aligning with Microsoft’s ambitions for exclusive titles on its platforms. However, the ongoing cost-cutting measures and strategic realignments at Microsoft have amplified risks for externally developed projects, particularly those in early or uncertain stages of development. This pattern puts pressure on studios to achieve defined milestones and maintain funding during organizational upheavals.
Analysis of earlier news on Contraband often highlighted its potential to carve out a fresh niche for cooperative open-world games, leveraging Avalanche’s strengths in emergent gameplay. However, repeated delays and the absence of substantial updates led to doubts among industry observers and fans alike. Before the current halt, Avalanche’s own restructuring—including prior layoffs and office closures—had already hinted at deeper challenges in sustaining major new IPs. By contrast, initial coverage was marked by speculation and optimism about innovative mechanics and Xbox Game Pass integration, expectations left largely unmet as development stagnated.
Frequent project suspensions and studio closures in the gaming industry reveal the high stakes and volatility of large-scale game development, particularly for ambitious, collaborative projects across major platforms. Prospective employees and partners may find it valuable to monitor signals such as prolonged lack of updates, staff reductions, and project silence, as these could indicate uncertainty or risks facing a game’s release. Studios reliant on funding from bigger publishers should build contingency plans and diversify their project pipelines, as market conditions or strategic pivots at top-level organizations can have direct and abrupt impacts on development. Players tracking the fate of anticipated titles should consider that even well-promoted projects with recognizable brands and initial publisher support may face cancellation if business priorities shift. Insights from Contraband’s situation reinforce the importance of adaptive strategies in ensuring both developer resilience and project continuity under changing industry dynamics.
