For four years, fans of Avalanche Studios and Xbox were left in the dark about Contraband, the ambitious co-op smuggler’s game first announced in 2021. Today, that silence has been broken, but not with the gameplay reveal many were hoping for. Instead, reports suggest that Microsoft has officially stopped active development on the Xbox exclusive, a move that comes amid wider restructuring within the company’s gaming division.
The news was first reported by Stephen Totilo of Game File, who cited a source familiar with the matter. According to the report, development on the game is now “on hold.” This comes just weeks after the game’s official reveal trailer was quietly removed from the Xbox YouTube channel, a sign that many in the community saw as a grim omen.
Contraband was originally billed as a “co-op smuggler’s paradise” set in the fictional 1970s world of Bayan. The game was being developed by Avalanche Studios, the team behind the high-octane Just Cause series, and was described by its former game director, Omar Shakir, as the studio’s “most ambitious and spectacular game to date.” The project had been in the works for a reported five years, with Avalanche utilizing a “next generation” version of its Apex Engine.
While Microsoft declined to comment on the game’s fate to Game File, the decision to pause development is not an isolated incident. The report suggests that the game may have been impacted by recent cuts at Xbox’s publishing division, which oversees third-party exclusive titles. This internal reshuffle has reportedly hit the team hard, with multiple producers being let go. The news also follows a string of other reported cancellations and closures, including Rare’s Everwild and the studio behind the Perfect Dark reboot.
For now, the future of Contraband remains in limbo. Microsoft’s latest round of layoffs and project cancellations paint a picture of a company re-evaluating its portfolio. While the word “cancellation” has not been officially used, the move to stop active development leaves the fate of this once-promising title uncertain. Fans of Avalanche Studios can only hope that this is a pause and not a permanent end to what could have been a truly spectacular game.
