Development on Contraband, the long-awaited Xbox exclusive from Avalanche Studios, has officially been paused. The co-op open-world game, originally revealed during the 2021 Xbox Showcase, had been in development for five years but will no longer move forward—at least for now.
The news was first reported by Game File, and later confirmed in an official statement from Avalanche. The studio stated:
“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.”
Microsoft has not publicly commented on the game’s cancellation, but internal sources suggest that the project was placed “on hold” rather than outright canceled. However, some reports, such as from Bloomberg, claim the project has been entirely shut down.
Contraband was being developed as a cooperative open-world smuggling game set in the 1970s, in a fictional world named Bayan. At the time of its announcement, director Omar Shakir described it as Avalanche’s “most ambitious and spectacular game to date,” building on the studio’s experience from titles like Just Cause, Mad Max, and Rage 2.
Despite the game’s promising setup and backing from Xbox Game Studios Publishing, there had been no gameplay footage or major updates in the four years since its reveal. That long silence left fans uncertain about the project’s status, which is now officially on pause.
This move also comes during a turbulent time for Xbox’s first-party operations. In recent months, Microsoft has undergone significant layoffs across its gaming division, with reports of up to 9,000 job cuts. Other projects reportedly affected include Rare’s Everwild and the reboot of Perfect Dark, both of which are also believed to be canceled or significantly scaled back.
For Avalanche Studios, Contraband was meant to be a bold leap forward. Now, with its future unclear, the studio’s next steps remain to be seen.
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