Darrell Gallagher Departs Xbox Following Perfect Dark Reboot Cancellation & Closure of The Initiative

Perfect Dark Reboot and Darrell Gallagher

Darrell Gallagher, former head of The Initiative, has officially left Xbox after the studio’s closure earlier this year.

Gallagher confirmed his departure in a LinkedIn post on September 15, describing his time with the company as "an incredible journey" that ended with the wind-down of Perfect Dark and The Initiative. He praised the team he led, noting how proud he was of their creativity and dedication, and thanked both Xbox and the community for their support.

"I couldn’t be prouder of the talented and passionate team I had the privilege to assemble and lead," Gallagher wrote. "Together, we set out to reimagine an iconic franchise and poured creativity, craft, and dedication into every step of the way." While the project ended sooner than expected, Gallagher expressed excitement for what lies ahead, both for himself and the developers he worked with.

The Initiative’s Short Run

Gallagher founded The Initiative in April 2018 under the Xbox Game Studios banner, after leaving his role as senior vice president and head of development at Activision Blizzard. Prior to that, he spent more than a decade leading Crystal Dynamics, where he oversaw major projects including Tomb Raider.

The Initiative was positioned as a "AAA studio" within Xbox and revealed its debut project in 2020: a reboot of Perfect Dark, co-developed with Crystal Dynamics. Hype was high, but things didn’t go as planned.

By July 2025, Microsoft shut down The Initiative and canceled the Perfect Dark reboot during a wave of Xbox layoffs. These cuts also affected Rare’s Everwild and an unannounced ZeniMax project.

According to Windows Central, the closure was directly tied to the cancellation of Perfect Dark. An internal email from Xbox Game Studios head Matt Booty reportedly explained that the decision was part of a larger effort to "adjust priorities and focus resources" across the division.

A Deal That Fell Apart

Interestingly, Perfect Dark wasn't "fully abandoned" when The Initiative closed. According to Bloomberg, leaders from both Crystal Dynamics and The Initiative later spent two months searching for a new publisher and funding.

While several parties showed interest, Take-Two Interactive emerged as the most likely option. However, negotiations fell apart, partly due to disagreements over the "long-term ownership" of the franchise.

As a result, the deal collapsed, leading to layoffs at Crystal Dynamics last month as the project's revival hopes faded entirely.

What’s Next?

Gallagher hasn’t revealed his future plans just yet, but judging from his closing words, "Here’s to new adventures and to celebrating the journey we’ve shared," it’s clear he’s not stepping away from the industry anytime soon. For now, we can only wait and see where his next chapter in gaming begins.