Xbox Halts Development on Contraband, Avalanche Studios’ Long-Silent Co-op Smuggler Game

Contraband (Credit: Xbox)

Microsoft has officially stopped active development on Contraband, the co-op open-world title in the works at Avalanche Studios, best known for the Just Cause series.

First unveiled during the Xbox Games Showcase at E3 2021, Contraband was pitched as a “smuggler’s paradise” set in the fictional 1970s world of Bayan. The reveal came with a stylish CGI trailer backed by Steely Dan’s “Do It Again” — but no gameplay footage ever followed.

In a statement posted on its website, Avalanche confirmed the pause, saying, “Active development has now stopped while we evaluate the project's future. We’re thankful for the excitement we’ve seen from the community and will give an update on what’s next as soon as we can.”

The original trailer was recently delisted from Xbox’s YouTube channel, sparking speculation about the game’s fate. Many wondered whether this was due to a music licensing issue or an early sign of trouble — now, it seems the latter was closer to the truth.

This news follows a wave of cuts at Microsoft in July, which saw roughly 9,000 jobs eliminated company-wide, including hundreds in its gaming division. Several projects were scrapped during that period, including Rare’s Everwild, The Initiative’s Perfect Dark, and a new MMORPG from ZeniMax Online Studios.

While Avalanche’s statement leaves the door open for a possible revival — perhaps with a different publishing partner — the game’s long silence and current industry climate make its future uncertain. For now, Contraband joins a growing list of ambitious Xbox projects that never made it past the planning stage.