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Microsoft pauses development on Avalanche Studios’ Contraband

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Last updated: 07.08.2025 23:04
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Microsoft has paused development on its upcoming shooter, Contraband.

Stephen Totilo’s Game File broke the news late this evening, but there’s been no formal word from Microsoft or developer Avalanche Studios.

The report claims neither Avalanche or Microsoft have responded to comment, but “a source familiar with the matter” noted the production had been put “on hold,” and the announcement trailer for Contraband was reportedly set to private on its YouTube channel several weeks ago.

It’s unclear if the project has been shelved due to internal pressures or as a result of the 9000 layoffs Microsoft made across its gaming division on July 2, but we believed at the time that The Initiative’s Everwild and Perfect Dark were the only two games cancelled directly as a result of the cuts. We did, however, later learn that cuts to Xbox’s publishing division also impacted Romero Games’ unannounced FPS. Forza Motorsport developer Turn 10 has also reportedly been “shuttered.”

Shortly after the announcement in 2021, developer Avalanche Studios’ then-CEO Pim Holfve told GamesIndustry.biz: “We’ve had a great relationship with Microsoft, and working with a first party has been intriguing as well, seeing what that actually means in terms of support and getting closer to the hardware. It’s a new type of partnership for us.”

Just weeks after confirming The Outer Worlds 2 would be the first Microsoft game to retail for $80, Microsoft reversed the decision, revealing the highly-anticipated sequel will now launch for $69.99 in keeping with typical AAA pricing.

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