While Crystal Dynamics confirmed last week that it was being hit with a new round of lay-offs, a new report indicates that before this, the studio was still working on Perfect Dark despite the project having been cancelled earlier this year. According to a report by Bloomberg’s Jason Schreier, Embracer Group was working on a deal that would involve transferring ownership of the Perfect Dark IP, which would have allowed the title to still be developed and released.
According to the report, the deal would have involved Embracer acquiring the IP from Xbox, which currently owns the rights to Perfect Dark, and selling it to Take-Two Interactive. The latter company would then fund the development of Perfect Dark at Crystal Dynamics and act as its publisher. However, this deal didn’t come to pass, with the report citing sources requested anonymity that the companies weren’t able to come to an agreement about the long-term ownership of Perfect Dark as a franchise.
With this report in mind, it looks like the lay-offs affecting Crystal Dynamics largely had to do with parts of the studio still working on Perfect Dark. The studio was seemingly still developing the game while its leadership, along with the leadership of now-defunct studio The Initiative, was looking for a new publisher that would help fund the game. As part of its lay-offs announcement, Crystal Dynamics didn’t really provide a reason or even details about how many of its employees were affected by the lay-offs.
“Today we made the very difficult decision to part ways with a number of our talented colleagues as the result of evolving business conditions. This decision was not made lightly,” wrote the studio in its announcement. “It was necessary, however, to ensure the long-term health of our studio and core creative priorities in a continually shifting market.”
Perfect Dark, which was being developed jointly by The Initiative and Crystal Dynamics, had reportedly been cancelled back in early July, coinciding with a number of lay-offs affecting Microsoft. Along with this, Xbox Game Studios’ Matt Booty also revealed in an internal email that projects like Everwild were also being cancelled. As a result of the game’s cancellation, reports also indicated that Microsoft was shutting down The Initiative.
Despite this, however, Booty’s email did note that Microsoft still had more than 40 projects in active development, with the company maintaining a release schedule for “this fall, and a strong slate headed into 2026.”
While the Perfect Dark project might ultimately be dead for the time being, Crystal Dynamics had confirmed in the announcement of its most recent lay-offs that its still-in-development Tomb Raider project was unaffected. While this Tomb Raider project was announced all the way back in 2022, there have been no details revealed for it as of yet aside from the fact that it is being developed on Unreal Engine 5.
The last major release by Crystal Dynamics was Marvel’s Avengers – a live-service title that was released to poor critical and commercial reception, and was ultimately de-listed from online storefronts.
