Just Cause dev shut its Liverpool studio after Contraband stalled — here’s what that means

Another Xbox-published project has quietly slipped off the board, and a real studio just paid the price. Avalanche Studios Group-the team behind the glorious chaos of Just Cause-has shut its Liverpool office and cut 31 roles after Microsoft reportedly paused, then shelved, the co-op smuggler game Contraband first teased at E3 2021. For players, this doesn’t just mean one canceled title; it means fewer big sandbox swings from a studio that built its name on explosive experimentation, and one less potential pillar for Xbox’s co-op/Game Pass lineup.

Key Takeaways

• Avalanche has closed its Liverpool studio, eliminating 31 jobs after a collective consultation that began in September. The rest of the company remains intact.
• Contraband-the 1970s co-op smuggling sandbox revealed during Xbox’s 2021 showcase—was reportedly paused earlier this year and is now effectively canceled.
• Don’t expect a fresh Avalanche IP to fill that gap soon; the studio is likely to focus on keeping existing games alive and regrouping in Sweden.
• For Xbox players, it’s another dent in the promised pipeline of new first-party/partnered exclusives for Game Pass.

Breaking Down the Announcement

Avalanche’s Liverpool closure is now official, with the studio stating 31 roles were impacted and the process finalized following the UK’s collective consultation rules. Reports tie the move to Microsoft’s decision to put Contraband on ice after years of unclear progress. If you’ve been following the project, that tracks—Contraband never showed gameplay after its 2021 reveal, and the radio silence out of Xbox’s showcases since then was a flashing red light.

This caught my attention because Avalanche, at their best, makes the kind of open-world toys you want to break, rebuild, and break again. Just Cause 2’s grapple-tether-wingsuit trifecta was the blueprint for modern sandbox traversal. A co-op riff on that formula—a convoy ambush gone spectacularly wrong with your friends—was an exciting pitch. The lack of updates over four years told a different story: scope creep, tech hurdles, or shifting platform priorities, pick your poison.

Why This Matters for Xbox and Game Pass

Microsoft’s slate has had wins, but 2024-2025 has also seen studio closures and project resets that hurt trust with players who bought into the “new IP every few months” vision for Game Pass. Contraband wasn’t just another exclusive; it was positioned as a distinct co-op sandbox—something that isn’t easily replaced by a safer sequel. When a partner-led project like this stalls, it exposes the risk of relying on long pipelines and CG teases without consistent gameplay proof.

For players, the immediate impact is simple: don’t expect Contraband to suddenly reappear at the next Xbox showcase. The co-op sandbox slot it might’ve occupied now looks open-ended. If you were hoping for “Just Cause chaos but with friends” on Game Pass, you’ll need to look elsewhere for that flavor—maybe into emergent heist or extraction spaces, but nothing with Avalanche’s signature physics-driven flair.

Where This Leaves Just Cause and Avalanche’s Future

Despite the closure, Avalanche’s core studios in Sweden remain. That matters because Avalanche is more than Just Cause—they’ve split their output across labels and projects like Generation Zero and theHunter: Call of the Wild, which keep dedicated niches humming. But big, shiny new IPs are expensive, and losing a platform-funded project like Contraband usually forces a reset to safer bets.

What about a new Just Cause? The series is beloved, but it’s not a small undertaking, and publishing dynamics are complicated—Square Enix has historically been involved with the IP. With resources tightened and a major project gone, it’s hard to see Avalanche leaping straight into a sprawling JC5 without a rock-solid partner and a clearer market window. If you love the series (I still boot Just Cause 3 just to chain a statue to a jet and see what happens), set expectations to “wait and see” rather than “announcement imminent.”

Short term, expect Avalanche to stabilize: maintain live games, consolidate tech, and reassess how to bring their chaos engine into a sustainable next project. That might mean smaller scope or clearer, earlier vertical slices before anyone commits to four years of silence and a CG trailer that ages like milk.

The Real Story: Mid-Size Studios vs. Platform Promises

Avalanche’s situation is a textbook example of the mid-size studio squeeze in 2025. If you’re not a console maker or a mega-publisher, you’re often shipping someone else’s dream on someone else’s dime. When priorities change at the top, your project changes with them—and your satellite teams end up on the chopping block. Liverpool wasn’t a huge headcount, but 31 humans is a whole game team’s worth of discipline and experience now scattered across an industry already dealing with too many layoffs.

There’s a lesson here for players, too: be wary of CG reveals with no follow-up. The games that make it across the finish line tend to show up regularly with real gameplay and real milestones. Contraband was exciting on paper—a 1970s smuggling fantasy with co-op emergent chaos—but the paper trail never turned into playable proof for the public. In 2025, that usually means the money or the mandate ran out.

TL;DR

Avalanche shut its Liverpool studio and cut 31 jobs after Microsoft reportedly shelved Contraband. The Swedish teams continue, but don’t expect a big new Avalanche IP soon—and definitely don’t wait on Contraband. If you’re a Just Cause fan, keep your expectations measured and your eyes on what Avalanche does next, not what was promised in 2021.