Microsoft Cancels Rare's Everwild Amid Xbox Layoffs

Microsoft has reportedly canceled Rare's long-in-development game Everwild amid sweeping layoffs confirmed across Xbox today.

IGN obtained an internal memo from Xbox chief Phil Spencer detailing the restructuring, which reportedly affects over 9,000 Microsoft employees globally. Candy Crush maker King and Bethesda studios appear particularly impacted.

VGC initially broke the Everwild cancellation story, with IGN sources verifying the report. Microsoft hasn't yet provided official comment.

Spencer's memo avoided specific details, stating: "Your team leaders will communicate organizational changes in the coming days."

The full memo shared with gaming staff reads:

Today we're announcing difficult organizational changes affecting colleagues across Microsoft Gaming. To ensure long-term success and focus on strategic growth, we're streamlining operations and reducing management layers – aligning with Microsoft's broader efficiency initiatives. Out of respect for affected employees, specific details will come from team leaders shortly.

These changes come despite record engagement across our platform, hardware, and game pipeline – successes built on previous tough decisions. To sustain this momentum, we must prioritize our strongest opportunities while meeting corporate expectations. This disciplined approach ensures we'll keep delivering exceptional gaming experiences for years to come.

While necessary strategically, these changes don't diminish our appreciation for impacted teams. Our achievements stem directly from their talent and dedication. HR is providing comprehensive transition support including severance, healthcare continuation, and preferential consideration for other Microsoft Gaming roles.

Thank you to everyone who has shaped our gaming community. We move forward with profound gratitude for your contributions.

Phil

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The Everwild cancellation follows its notable absence from Xbox showcases since its 2019 reveal.

Spencer previously expressed enthusiasm about Everwild during an XboxEra interview, mentioning his recent Rare studio visit to review development progress. The studio continues operating its successful live-service title Sea of Thieves.

"Our lineup lets us support projects like State of Decay, Double Fine's next title, and Everwild without rushing releases," Spencer noted, referencing Xbox's strengthened position following Bethesda and Activision acquisitions.

Everwild's development faced challenges including a creative reboot and leadership changes. Veteran designer Gregg Mayles (known for Banjo-Kazooie and Sea of Thieves) took over creative direction.

While reportedly blending third-person adventure with god game mechanics, Everwild's final direction remained unclear after years in development. Its 2020 trailer described "a unique experience in a magical natural world."

These layoffs mark Microsoft's fourth gaming division restructuring since its $69 billion Activision Blizzard purchase – following January's 1,900 job cuts, Arkane Austin/Tango Gameworks closures in spring, and September's 650-person reduction. Today's announcement coincides with Microsoft preparing next-gen Xbox hardware and a major gamescom presence.

Spencer told IGN recently: "Running a sustainable business requires making difficult choices – even unpopular ones – to enable future growth."