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Wayne Goodchild
Wayne Goodchild Senior Editor
Fact checked by: Jorgen Johansson
Updated: September 16, 2025
Studio Head Calls it Quits After Failed Perfect Dark Reboot
Darrell Gallagher founded The Initiative in 2018.
  • Darrell Gallagher out of a job as his studio is finally shuttered by Microsoft.
  • Microsoft canceled the Perfect Dark reboot as part of 9,000 layoffs.
  • The reboot faced high staff turnover, development issues, and weak gameplay reveals.

Less Than Perfect News

The Initiative was founded by Darrell Galagher under Xbox Games Studio to work on the Perfect Dark reboot. However, with that project now canned, Gallagher has announced that he’s hanging up his hat and moving on. 

The Initiative, as a studio, has also now finally bit the dust; parent company Microsoft announced in July that it’d be shuttering the studio, alongside other projects including Everwild, and a ZeniMax Online MMO. Over 9,000 people lost their jobs as part of this mass cull. 

Gallagher posted on LinkedIn yesterday about having to move on, even though it was sooner than expected. “After an incredible journey, my time at Xbox has come to a close with the wind-down of Perfect Dark and The Initiative. I couldn’t be prouder of the talented and passionate team I had the privilege to assemble and lead. Together, we set out to reimagine an iconic franchise and poured creativity, craft, and dedication into every step of the way.”

“The public reception and excitement for what we were building has been inspiring and deeply appreciated by all of us,” he added. “While this chapter is ending sooner than hoped, the spirit, talent, and achievements of the team will live on well beyond the project. I’m grateful to Xbox for the opportunity, to our partners for their support, and to the community for their belief in what we were creating.”

YouTube video

A Modern FPS Classic

The original Perfect Dark was released in 2000 for the N64, and was developed by Rare (the cancelled Everwild project was also a Rare IP). It followed Joanna Dark, a special agent with The Carrington Institute who’s on a mission to stop a rival company, dataDyne, from unleashing experiments involving alien technology.

It was followed by Perfect Dark Zero in 2005 for the Xbox 360, and a remaster of the original game in 2010, also for the 360. Each version is an FPS and was built on the game engine Rare developed for Goldeneye, but improved with new mechanics such as the ability to shoot out lights. 

Maybe it’s my age, but there’s something really lovely about early 2000’s 3D that I can’t put my finger on. See also: Deus Ex.

This dynamically affected the environment, creating opportunities for stealth that preceded games like Splinter Cell (2002) and Hitman (also released in 2000, this allowed lights to be destroyed but it didn’t affect gameplay). Each Perfect Dark title was well-received by critics, with the original often cited as a “modern classic.”

The reboot was announced in 2020, although work started on it in 2018 when The Initiative was founded. The reboot was also linked with Crystal Dynamics (Tomb Raider), where Gallagher worked as first the Director of Art, and then Studio Head, until January 2016. He spent a few years working at Square Enix and Activision before starting The Initiative. This studio also included devs who worked on God of War, and Red Dead Redemption, and for studios such as Insomniac and Naughty Dog.

Perfect Dark Slips Into The Endless Night of Cancellation

Despite this pedigree, The Initiative also had a habit of hemorrhaging staff, with one particularly notable exodus happening in 2022. Over 30 staff left the company within the year, including senior members who claimed that the “top down” management meant that excessive micromanagement affected development. 

The Perfect Dark reboot continued to receive updates via game expos, however, with the last one being a gameplay reveal trailer as part of the 2024 Xbox Games Showcase. This was met with some criticism from gamers, however, who noted that there was a distinct lack of concrete gameplay shown, which in turn prompted questions as to what The Initiative had been doing for the past six years.

Revelations about the “gameplay” trailer suggest the reboot wasn’t anywhere close to done.

Adam McDonald, a level designer on the reboot, took to Bluesky in July this year to finally respond to these claims. “There’s some fake stuff in it, and the real gameplay systems shown off worked juuust enough to look good in this video. We were rapidly making real design decisions so as to not knowingly lie to players about what the game will be. The parkour is all real, the hacking/deception is mostly real.”

McDonald also noted that the trailer was what’s often referred to as a “vertical slice,” which is effectively a playable tech demo and common to see shown in lieu of a full gameplay video. He also said “I would describe a huge chunk of my time at the studio as ‘development hell,’ but things were moving along during my final year and my impression is things were going better than ever in the past few months.”

Cuphead has gone from strength to strength as a franchise, branching out into an animated series.

While it’s up in the air what’s next for Gallagher, McDonald has already found a new position at StudioMDHR, the company behind Cuphead. This studio has been largely silent in terms of new game development, but has been actively recruiting more staff in recent months and releasing various Cuphead news; the latest was on Sept. 11, and involves music from the game being played live as part of the BAFTA Games In Concert series. 


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Wayne Goodchild

Senior Editor

Editor, occasional game dev, constant dad, horror writer, noisy musician. I love games that put effort into fun mechanics, even if there’s a bit of jank here and there. I’m also really keen on indie dev news. My first experience with video games was through the Game and Watch version of Donkey Kong, because I’m older than I look.