At The Game Awards 2020, Xbox unveiled a new game from its fledgling studio The Initiative: a reboot of Perfect Dark.
The two-minute trailer was purely cinematic, showing off an “eco-futuristic” Earth as a camera soared over a massive city bedecked in greenery. After zipping through a skyscraper, we saw a woman gazing at distant pyramids amid a raging storm. “Did you find what you’re looking for, Agent Dark?” a voice asks. “Not yet,” replied Joanna Dark. “This is only the beginning.”
Three years later, developer The Initiative is still, in many ways, only at the beginning.
At the time the trailer – created by an external CG house – was shown, it was “very obviously way far ahead of anywhere the game was at,” according to one developer who was working at The Initiative at the time. “We hadn’t even figured out any of our core game mechanics. We didn’t even really know what type of game we were making.”
Teasing new games with cinematic trailers years before the game itself is ready is a common practice in the industry. But The Initiative’s radio silence since combined with reports of major attrition at the studio have sparked questions about the project, exacerbated by its recent absence from Xbox’s summer games showcase. The concern is not unfounded: according to conversations with 13 sources familiar with the game’s development, little meaningful progress has been made on Perfect Dark since that 2020 trailer.
Why? The answer isn’t glamorous, but rather wrapped up in the realities of game development. The project has seen roadblock after roadblock, with problems such as a fraught co-development partnership, a pandemic, technological challenges, an ongoing exodus of significant talent, and unclear direction from management keeping the game in development limbo. And while a new partnership with Crystal Dynamics appears to finally be bearing fruit, multiple sources who have worked on the game recently say that Perfect Dark is still “in the earliest stages” of development, estimating that it is still roughly two to three years away from being ready for release.
Spy Experiments
The Initiative was founded and first unveiled at E3 2018, a strange outlier among a rash of significant acquisitions. The goal in all these acquisitions, as stated by leaders like Xbox head Phil Spencer and corporate VP Matt Booty, was to build out a massive catalog of games to sustain Xbox not just as a console, but as a broader service encompassing console gaming, cloud gaming, mobile, and more.
Amid Xbox Game Studios’ sudden ballooning to 23 internal studios, The Initiative stood out. It was one of only two studios added during that time that wasn’t an acquisition, and was instead spun up internally from scratch. The other, World’s Edge, was formed by existing Microsoft leads to shepard the already-internal Age of Empires franchise. But The Initiative was somewhat experimental: wholly new at the time it was announced, headed up by former Crystal Dynamics chief Darrell Gallagher, and with his former Crystal colleague Dan Neuburger as game director. Based in Santa Monica, the newly-formed creative team was, per Xbox, given freedom to select its first project, and opted to bring back Rare’s lapsed spy IP, Perfect Dark. Their selection dovetailed neatly with Xbox’s goals: Xbox wanted a “flagship” title within every major genre, and Perfect Dark could be the flag it planted in the underserved realm of spy/espionage.
Gallagher’s plan, which he and other studio leads partially laid out in a development video alongside The Game Awards trailer, was for The Initiative to craft a reimagined Perfect Dark that would be a true blockbuster, with the best graphics, innovative gameplay and tech, driven by a powerful narrative and a strong protagonist in Joanna Dark. Internally at The Initiative, early employees recall hearing comparisons to massive TV and film franchises, such as Game of Thrones or Westworld. Gallagher imagined a spy thriller with big, memorable set pieces, lots of physicality, and plenty of gadgets, all amid a hopeful eco-futurist setting masking a corrupt underworld. Several employees from the early days of the studio recalled the designation “AAAA” being thrown around as a way to emphasize the sheer size and scale of what they should be building (it was also used in at least one public job listing). Everyone I spoke to who recalled hearing the term said there was never a clear explanation of what it practically meant.
AAAA or otherwise, Perfect Dark was a big vision for what Gallagher expected would ultimately be a fairly small studio, even one that was packed with experienced, senior talent. His plan, sources say, was to have The Initiative work closely with other partners to become effectively a franchise steward of the Perfect Dark IP that would eventually become a long-running Xbox tentpole. And while The Initiative did eventually make a public announcement that it would be bringing on Crystal Dynamics to fill the partner role, it actually had a different co-development partner for the first several years of Perfect Dark’s life: Halo co-development studio Certain Affinity.
Uncertain Affinities
In the early days of the project, the overall mood was optimistic. Perfect Dark was an exciting IP that most were thrilled to be working on, first at The Initiative and then at Certain Affinity when the studio signed onto the project in 2019.
As with any early development process, much of this initial work consisted of nailing down a clear creative vision for what the game would consist of, and then developing a core gameplay loop that is both supportive of that vision and fun for the player. Studio leadership was fairly clear from early on that The Initiative’s Perfect Dark would see a balance of combat and espionage elements that would ideally feel like playing through a James Bond or Mission: Impossible film – the developers just had to figure out how to translate those memorable movie moments into video game format.
But while these core ideas remained roughly consistent throughout Perfect Dark’s development, exactly what the player would be doing to express them kept changing as ideas were pitched, prototyped, and then scrapped for something completely different over and over again. This process was expected at first, as a fairly normal component of game development. But as Perfect Dark moved into its second and third year, sources tell us that this process began to drag on much longer than expected, as leadership’s refusal to commit to any specific ideas or shape for the game began to frustrate both teams.
I don’t know why people just kept hitting the reset button.
One former employee, a woman, also expressed frustration both with the low numbers of female creative staff on the project generally during this time, as well as multiple meetings where male creative heads made insensitive suggestions that were difficult to push back on without more women in the room to support potential concerns. An Xbox spokesperson offered the following response to this specific topic:
“We are committed to addressing any and all concerns employees have, in accordance with our company policies. We have been and will continue to encourage employees to report workplace concerns when they have seen or experienced behavior that falls short of our culture, values, or policies. Employees can report workplace concerns in a number of ways, including anonymously.”
Among even more former employees we spoke to was a sense that the people in charge were unable to communicate a clear vision for the game they had so enthusiastically signed up to make. Or, some said, when they did manage to communicate that vision, leadership ignored or dismissed feedback from the experienced team they had put together. These repeated struggles over creative vision resulted, sources said, in build after build being thrown out, and internal frustration growing with each new reset.
“It was not that we didn’t know what we wanted, it was that we kept making things that weren’t what we wanted,” said one The Initiative developer. “We’d do it over and over again. The…levels we had when I left weren’t the same ones we’d had three months prior, or three months prior [to that]. I don’t know why people just kept hitting the reset button. That was definitely contributing to that feeling that we weren’t making any progress. People kept starting over.”
Some of this may have come down to a challenging relationship between The Initiative and Certain Affinity. Both Certain Affinity and The Initiative employees told me there was a seeming mismatch between Certain Affinity’s experience building focused, specific elements of clearly defined games as instructed, and The Initiative’s desire to have a creative partner to bounce ideas off of. What’s more, The Initiative was a very small studio still hiring up, and Certain Affinity was a large, established studio whose team vastly outnumbered The Initiative’s. As The Initiative began to staff up, the two studios found themselves with numerous senior staff roles duplicated across both offices whose visions often clashed, causing further tension on both sides and a general feeling of mistreatment across Certain Affinity in particular.
“We were set up in a way where no one at the remote studio reported to anyone at our studio,” one person recalled. “Only the top level of management had any established accountability relationship.”
And all these problems were worsened for everyone as the COVID-19 pandemic sent the world into a work-from-home situation that abruptly disrupted internal communications, lowered morale, and diluted any early attempts to build a studio culture at The Initiative. Multiple people I spoke to recalled the onset of the pandemic as a major morale killer, even for employees who were already used to working from home. But they also noted that the pandemic was but one major stumbling block for a studio already struggling.
“I blame The Initiative,” said one former The Initiative employee. “I don’t blame our development partners. We chose not to hold anyone accountable to the vision, and we just let people keep trying things. Yeah, people were all over the place. It was a giant game of telephone. You heard that expression thrown around in the process all the time. ‘Oh, it’s telephone! I said this, but then this person said this, then they went and talked to their manager, then their manager talked to our manager, then our manager talked to this lead, and by the time the message got to the other side, it’s been completely mangled beyond recognition.’”
Despite all these setbacks, in the spring of 2021, a few months after The Game Awards trailer announcement was shown, the two studios had put together a fairly polished proof of concept of Perfect Dark. It included a handful of unfinished, prototype levels, a loose narrative, and showcased some basic traversal, gadgets, and combat. It was a major milestone for the team, but hardly anyone was happy in its wake. Not long after, the news came that Certain Affinity and The Initiative would not renew their contract for another year. While the decision came as a relief to both parties, it left Perfect Dark short over half its development team at a time when it was supposed to be entering the next major phase of development. And more departures were on the horizon.
A Lack of Initiative
In early 2021, before Certain Affinity’s departure and the major development milestone, Perfect Dark design director Drew Murray left the studio to return to his former employer, Insomniac Games, as a principal designer. All our sources who were there at the time cited him as the first significant exit in what would become a veritable avalanche throughout 2021 that would nearly deplete the studio.
A tally of those who list their work at The Initiative on LinkedIn reveals 35 total departures in 2021 alone. The Initiative lost another 12 in the first three months of 2022, and LinkedIn numbers indicate the studio did not hire nearly as many new employees in the same period or even since. While these numbers are rough estimates, those who were there at the time suggest that roughly half the studio was gutted, with the total number of employees dipping down into the 30s at its lowest.
Why were so many people leaving? Largely, frustration at a perceived lack of forward momentum, exacerbated by more and more people departing. Because The Initiative had hired so many industry veterans in a competitive geographic location, many found new roles quickly and easily. Entire departments were hollowed out, and progress on Perfect Dark halted as people waited for key decision-making roles to be filled. One developer there at the time recalled “literally” doing “almost nothing for nine months,” waiting for positions to be filled and decisions on key game elements to be made.
You’d get two or three people that would show something off…and then the announcement that two or three people were leaving.
“It’s frustrating to not make progress…it was just a dark time,” they said. “You’d basically get two or three people that would show something off at a ‘show and tell,’ like new texture mapping or a lighting thing they did or a blockout of a new level they’re messing with or whatever, and then you’d get the announcement that two or three people were leaving. It was very hard to stay positive when that kind of energy and lack of progress happens.”
Sources at The Initiative during this time recall Gallagher and other studio leads trying to maintain a positive outlook, reassuring employees that Microsoft believed in them and that a new co-development partner was on the way. Multiple people recall Microsoft Studios head Matt Booty giving a “pep talk” of sorts, reassuring remaining employees that the parent company thought things were going great.
In the middle of 2021, with Certain Affinity gone and the studio bleeding talent, leadership at The Initiative had to figure out who, exactly, would be doing the bulk of the development work on the project going forward. And in September, a savior arrived in Gallagher’s old studio: Tomb Raider developer Crystal Dynamics. According to one former Crystal Dynamics employee, the plan was for their studio to supplement and support The Initiative’s vision – not to fully take over. But rather quickly it became apparent to Crystal Dynamics that Perfect Dark and The Initiative were going to need a lot more help than they had realized.
After multiple necessary months of onboarding and discussion, the new co-development partner of Perfect Dark was handed the vertical slice that The Initiative had assembled with Certain Affinity. But according to individuals who worked at Crystal Dynamics at the time, what they received was a bit of a mess. While some sources attributed that to the chaotic relationship between Certain Affinity and The Initiative, as an added stress, The Initiative had opted to jump to Unreal Engine 5 in the interim before Crystal Dynamics came on board, adding to the amount of work needing to be done. One former Crystal Dynamics employee described what they were handed as a construction with no foundation. “A lot of the project, if not almost all of it, ended up needing to be wholly reworked,” the source said. “They had done three years of work on it already, but we didn’t benefit from three years of work.”
Which is how in 2022, nearly four years after the studio was formed, Perfect Dark was essentially started over from scratch in Unreal 5. And while the two studios did broadly seem to get along better than in the previous partnership, after a year of high attrition at The Initiative, it was hardly in a state to lead development on a massive project. Crystal Dynamics, well-staffed, began to step into missing leadership roles and take more and more ownership of the project. This once again resulted in disagreements and infighting in departments that had established leaders on The Initiative side.
Management, meanwhile, seemed impatient. The Initiative had been working on Perfect Dark in some form since 2018, announced it in 2020, but in 2022 still didn’t have much to show for itself. Sources at The Initiative and Crystal Dynamics say that leaders at both studios began pushing for speed and tighter deadlines as a result. But the development team was still building the game’s foundations. Even with Crystal Dynamics’ resources, the studio didn’t seem to have the numbers to meet the tight deadlines being demanded of it. Crystal Dynamics did hire more people onto the project over time, but those I spoke to described feeling constantly understaffed for what was asked of them. Multiple leads told me of struggling to fill necessary roles on their teams, and described notable numbers of developers departing in frustration (though not as severe as in 2021). While no one we spoke to reported significant crunch, many described a sense of stress associated with fears of what would happen if deadlines weren’t met.
Despite these troubles, throughout 2022 progress was slowly but surely made on Perfect Dark. Crystal Dynamics employees tell me that Embracer Group’s acquisition of the studio in August of that year didn’t impact much internally, and by the end of the year, it had fully settled into the driver’s seat on the project. A recent announcement of Embracer-wide layoffs has employees nervous but (at least at the time of this writing) unimpacted so far. Multiple sources who have worked on Perfect Dark in the last year told me that in its most recent iteration, they would consider Perfect Dark to be more of a Crystal Dynamics game than one by The Initiative.
A Hands-Off Approach?
I reached out to all three studios involved with Perfect Dark – The Initiative, Certain Affinity, and Crystal Dynamics – for comment ahead of this piece’s publication. Certain Affinity responded directly in the following way:
Certain Affinity is proud of its 17-year history of co-developing hugely popular games like Halo and Call of Duty, among many others. We’ve partnered with and continue to co-develop alongside talented teams of all sizes and at all stages of development, including early ideation, concept, pre-production, production, and beyond. We’re incredibly grateful for our deep, longstanding partnerships across the industry, including with Microsoft.We collaborated closely with The Initiative during the initial stages of ideation for Perfect Dark. Following the successful completion of our engagement, we have not been involved with the project. We’re excited to see what the team has come up with for the newest installment of the Perfect Dark franchise. We’re rooting for The Initiative and can’t wait to jump in and see what Joanna Dark is up to when the game is released.
Xbox took a different approach. In direct response to my specific inquiries, Xbox provided contextual information from past interviews with Darrell Gallagher about the purpose and direction of The Initiative and its Perfect Dark reboot, all of which complimented what my sources told me and has been included in the narrative above where relevant. But Xbox also connected me with Booty following its Xbox Games Showcase in June for an interview about its larger strategy for its studios, as well as regarding The Initiative more specifically.
Developers from all three studios involved with Perfect Dark told me that throughout development, Xbox has been remarkably hands-off with the project – not unlike its reported attitude toward Arkane’s Redfall. One described the parent company’s involvement as simply “giving us money and letting us decide how to move forward and requesting milestone updates.”
The amount of time I’ve spent on the phone with Darrell and everybody at that studio is sort of the opposite of hands-off.
I questioned Booty on this point – his response was surprisingly jovial.
“I will just chuckle a little bit at the ‘hands-off,’” he said. “The amount of time I’ve spent on the phone with Darrell and everybody at that studio is sort of the opposite of hands-off, and the amount we’ve been down there.”
Booty later explained Xbox’s approach as a middle ground, of sorts, between very hands-on parents that retain full control and total autonomy. And his explanation makes sense – Booty could be on the phone every day with The Initiative leadership, but rank and file employees might never know about it. He went on to say that some of The Initiative’s struggles were less a result of Xbox’s attitude toward its studios, and more an inevitable reflection of the struggles born from starting a studio from scratch just ahead of a global pandemic, which we spoke about in detail elsewhere in the interview. And he confirmed some of what many sources suggested to me about why things didn’t work out: early-stage creative ideation during a pandemic was difficult, and the mismatch between The Initiative and Certain Affinity’s respective needs and skillsets made things even more challenging.
“So many things have changed in terms of how we want to staff games. I think that going forward, almost every major AAA game out there is using some level of co-development, which I separate from outsourcing. Outsourcing is very: Here’s a spec, please go build this, give it back to us. Co-development is: This is a studio, a group of people who are a creative entity, how can you work with them? One of the things we learned on Perfect Dark is there is a difference between studios that have that creative DNA versus studios that have done more traditionally outsourcing, no matter how complex, and we just had to find the right rhythm there.”
Booty goes on to pin the wave of departures, at least in part, on the specific flavor of co-development that The Initiative is trying to pioneer. “Is it perhaps a little different than what has been done over the last five to ten years? Sure. But I think it’s more of the way that we’re going to see things getting built going forward than not. And that’s why, despite all the bumps in the road and the hiccups, we’ve had some people come on board from other very traditional teams that show up and go, ‘Wait a minute, this is not how I’m used to working.’”
Amid all this, though, he affirms that The Initiative and Crystal Dynamics have “hit their rhythm” on Perfect Dark, saying he had a “full review” of the game in May. He adds that they’re continuing to try and build a leadership team at The Initiative and grow the studio. When I ask him if Crystal Dynamics outnumbers The Initiative on Perfect Dark, he says “not really,” but declines to get into specifics. He maintains that the two studios are not thought of as separate entities, but rather “Team Perfect Dark,” though he does note that “half of Crystal” is working on Perfect Dark right now (the other half is on other projects, most notably Tomb Raider). At the time this piece was written, there was a single job posting for The Initiative on the Microsoft website – for an IT Manager. At this same time, LinkedIn indicates 48 employees work at The Initiative.
We can’t lose the ability to start a new studio.
My takeaway from talking to 13 individuals from across these three companies, as well as formally with Booty, is neither tidy nor especially earth shattering. Game development is hard and getting harder, especially in recent years amid the ripples of a pandemic, economic struggles, and increasingly complex technology being used to both create and run AAA games. Co-development relationships, while quite common industry-wide, can make all this even more challenging if not managed carefully. But it’s also true that many studios industry-wide are grappling with these problems and succeeding in spite of them, while The Initiative’s struggles with management, communication, and creative vision were only increasingly exposed by the challenging environment it found itself in.
The good news, though, is that The Initiative and Crystal Dynamics – or rather “Team Perfect Dark” – seem to at last be making progress. Perfect Dark is now further on than Certain Affinity’s vertical slice from 2021 and with stronger foundations, though it still has a long way to go. All my sources with recent knowledge of its status say it’s still in pre-production, roughly two to three years away from release. It’s still an FPS balancing combat and espionage, with an emphasis on spy gadgets, some experimental movement tech, and a focus on narrative. Recent plans seem to be leaning toward some kind of episodic format – though the exact form and shape of it has yet to be determined, and could still change entirely before release.
It’s still far too early to say whether or not Xbox’s The Initiative experiment from 2018 will be a success or not. The company has not spun up any new internal studios since then (not that it’s announced, anyway), but it has continued its acquisition spree, most recently with efforts to bring the behemoth that is Activision Blizzard into the fold. “We can’t lose the ability to start a new studio,” Booty emphasizes during our interview. “It’s really important.” And Booty is right. In these recent years of transformation and growth for Xbox gaming, the jury remains out on a critical question: does Xbox’s middle-ground studio involvement strategy work for a brand new initiative? Or is Xbox doomed to keep gobbling up the studios of others if it won’t change its tactics? In that context, there’s a lot more riding on Perfect Dark than just one game. The answer, potentially still years away, could be a harbinger both for the future of the Perfect Dark franchise, and for the future of Xbox.
Rebekah Valentine is a senior reporter for IGN. You can find her on Twitter @duckvalentine.
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