Avalanche Studios has officially closed its Liverpool studio following the cancellation of the highly anticipated Xbox exclusive, Contraband. This decision resulted in the layoff of 31 staff members as the studio moves forward with a "collective consultation process." Contraband, which was intended to offer a cooperative open-world experience set in a fictional Southeast Asian setting, was first revealed in June 2021 but saw development halted earlier this year after Microsoft decided to cancel the project. The shutdown of the Liverpool studio reflects broader workforce reductions within Microsoft’s game development teams amid a shift in focus towards artificial intelligence.

What led to the cancellation of the game Contraband?

The cancellation of Contraband was a decision by Microsoft made amidst ongoing restructures within its game studios, and it halted active development of the project, which had shown potential but ultimately did not align with Microsoft's current strategic direction.

Contraband was designed as a 1970s-themed co-op adventure that emphasized multiplayer teamwork within an immersive open-world environment. The cancellation came as a disappointment to fans looking forward to new content from Avalanche Studios, known for their successful Just Cause series. The cancellation of Contraband is just one part of a larger trend as game developers, including Microsoft, reevaluate their project priorities in light of market changes and the growing influence of AI technologies.