In a year already marked by industry upheaval, Microsoft and Avalanche Studios have quietly shelved Contraband, the ambitious co-op smuggling sim that once promised to be a crown jewel in Xbox’s exclusive lineup. First teased in 2021, the game was pitched as a “co-op smuggler’s paradise” set in the fictional 1970s world of Bayan—a bold, atmospheric concept that now joins the growing graveyard of unrealized Xbox titles.
Contraband was unveiled during Microsoft’s E3 2021 showcase with a moody, cinematic trailer. Though light on gameplay, the teaser hinted at a gritty, retro-inspired world filled with vehicular combat, underground dealings, and co-op chaos. Developed by Avalanche Studios—the team behind Just Cause, Mad Max, and Rage 2—the game was to leverage their proprietary Apex Engine, optimized for Xbox Series X|S.
Game director Omar Shakir described it as Avalanche’s “most ambitious and spectacular game to date,” promising emergent gameplay and vast open-world vistas. The pitch was tantalizing: a smuggling sim with dynamic co-op mechanics, vehicular mayhem, and a rich 1970s aesthetic. But after that initial reveal, radio silence followed.
Despite the hype, Contraband never received a release date or gameplay showcase. Over the next four years, Avalanche Studios faced internal challenges, including the closure of its New York and Montreal offices in 2024 and the layoff of 50 employees—roughly 9% of its workforce. Meanwhile, Microsoft’s own restructuring efforts intensified, culminating in the July 2025 layoffs of nearly 9,000 employees and the cancellation of several projects, including Perfect Dark, Everwild, and an unannounced MMO from ZeniMax Online.
These cuts hit Xbox Game Studios Publishing hard, especially its partnerships with external developers. According to Bloomberg and Game File, Contraband was among the casualties, with Microsoft reportedly pulling the plug on active development.
🧭 The Official Statement: “Evaluating the Project’s Future”
Avalanche Studios confirmed the news in a statement posted to their website:
“Over the past several years, Avalanche Studios Group and Xbox Game Studios Publishing have collaborated on Contraband. Active development has now stopped while we evaluate the project’s future. We’re thankful for the excitement we’ve seen from the community since we announced and will give an update on what’s next as soon as we can.”
While the language avoids the word “cancellation,” the tone and timing suggest that Contraband may never see the light of day. The game’s teaser trailer has even been set to private on Xbox’s official YouTube channel.
🎮 What Could Have Been
The concept of Contraband stood out in a sea of live-service shooters and fantasy RPGs. A co-op smuggling sim set in a politically charged 1970s world had the potential to explore themes of rebellion, survival, and camaraderie. With Avalanche’s pedigree in sandbox chaos and vehicular gameplay, Contraband could have carved a unique niche in the Xbox ecosystem.
Instead, it joins a growing list of promising titles that were announced with fanfare but quietly shelved amid corporate restructuring and shifting priorities.
The shelving of Contraband isn’t just about one game—it’s emblematic of a broader issue in AAA development: the disconnect between ambitious pitches and long-term support. Studios are encouraged to dream big, but when the winds shift—be it layoffs, leadership changes, or market pivots—those dreams are often the first to be sacrificed.
For creators and players alike, it’s a sobering reminder that even the most promising ideas can be lost in the shuffle. And for Avalanche Studios, it’s another setback in a turbulent chapter.
