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Avalanche Studios Pauses Contraband Development as Xbox Emphasizes AI Investments

This pause comes as Microsoft reallocates resources toward AI following massive Xbox layoffs that triggered multiple game cancellations.

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Contraband, the mysterious open-world game from Just Cause studio, put on ice

Overview

  • Avalanche Studios confirms that “active development has now stopped” on Contraband while its future is evaluated.
  • The 1970s co-op open-world title by Just Cause developer Avalanche Studios debuted at E3 2021 but has seen no substantive updates since its cinematic reveal.
  • The development halt follows Microsoft’s recent mass layoffs in the Xbox division and the shelving of several first- and third-party projects.
  • Xbox aims to allocate up to $80 billion in AI spending this fiscal year, reshaping priorities across its gaming studios.
  • A Microsoft spokesperson indicates that Hideo Kojima’s OD collaboration remains in active development despite broader cutbacks.