In a surprising twist following one of 2025’s biggest gaming disappointments, Take-Two Interactive has hired the two key figures behind the cancelled Perfect Dark reboot to start a completely new studio under its 2K Games label. Bloomberg reporter Jason Schreier broke the news on December 8, 2025, revealing that Darrell Gallagher and Brian Horton are getting a second chance after Microsoft pulled the plug on their ambitious project.
Gallagher served as studio head of The Initiative, the Microsoft-owned studio that was developing Perfect Dark, while Horton was the game’s creative director. Both are industry veterans with impressive resumes, having previously worked on franchises like Tomb Raider and Marvel’s Spider-Man. Now they’re reuniting under a publisher that apparently sees value in what Microsoft left behind.
The Perfect Dark Cancellation That Shocked Everyone
Perfect Dark was cancelled on July 2, 2025, as part of a massive Microsoft restructuring that saw 9,000 employees laid off across the company. The Initiative, which Microsoft had established in 2018 specifically to create big-budget AAA titles, was shut down without ever releasing a single game after seven years of operation.
The cancellation came just over a year after Microsoft finally showed off gameplay footage at the Xbox Games Showcase in June 2024. That reveal had been genuinely impressive, featuring sleek spy action and promising immersive sim mechanics that had fans excited. But behind the scenes, the project was apparently struggling with creative direction issues and personnel turnover that ultimately made it unsustainable.
Take-Two Almost Saved the Whole Game
Here’s where the story gets interesting. According to earlier reporting from Schreier, Take-Two Interactive actually came close to rescuing the entire Perfect Dark project before it was cancelled. After Microsoft made the decision to kill the game, leadership from both The Initiative and Crystal Dynamics (the co-development partner) spent two months shopping the project around to various publishers.
Take-Two was one of the interested parties and negotiations got serious enough that a deal seemed possible. But talks ultimately broke down over one critical sticking point: who would own the Perfect Dark intellectual property. Microsoft wasn’t willing to let go of the IP rights, and Take-Two apparently wasn’t interested in funding development of a game it wouldn’t own. The deal collapsed, Crystal Dynamics went through layoffs, and Perfect Dark seemed dead for good.
Who Are Darrell Gallagher and Brian Horton
Darrell Gallagher isn’t just some random studio executive. He previously worked at Crystal Dynamics where he oversaw the successful 2013 Tomb Raider reboot and its sequel, Rise of the Tomb Raider. When Microsoft recruited him in 2018 to head The Initiative, it signaled serious ambitions for the studio. Gallagher brought in talent from industry heavyweights like Naughty Dog, Rockstar Games, Santa Monica Studio, and BioWare.
Brian Horton has an equally impressive background. He was the senior art director for the 2013 Tomb Raider and director of Rise of the Tomb Raider at Crystal Dynamics. He then moved to Insomniac Games where he served as creative director on Marvel’s Spider-Man: Miles Morales and was working on Marvel’s Wolverine before leaving to join The Initiative as Perfect Dark’s creative director in summer 2024. His departure from Wolverine was notable at the time, showing how committed he was to the Perfect Dark vision.
Industry Veterans With Proven Track Records
Both developers have LinkedIn profiles now showing their new positions at 2K. Horton described himself as Vice President and head of creative at the new studio alongside Gallagher. The fact that Take-Two is giving them VP-level positions and the resources to build a new studio from scratch suggests the company has big plans for whatever they’re cooking up.
What Will the New Studio Make
Neither Take-Two, 2K, Gallagher, nor Horton have revealed what the new studio will be working on. But the speculation is obvious and impossible to ignore. These two just spent years developing a spy-action immersive sim with stealth mechanics and near-future technology. Why would Take-Two hire this specific team if not to make something similar?
The smart money is on a spiritual successor to Perfect Dark. Take-Two can’t use the Perfect Dark name or characters since Microsoft owns that IP, but nothing stops them from making a game with similar themes, gameplay mechanics, and genre. Think about how Bloodstained served as a spiritual successor to Castlevania, or how Mighty No. 9 attempted to be a Mega Man successor. The concept is proven in the industry.
The Troubled History of Perfect Dark’s Development
To understand why this project failed at Microsoft but might succeed at Take-Two, you need to know Perfect Dark’s messy development history. The Initiative was supposed to be Microsoft’s answer to Sony’s prestigious first-party studios. They recruited top talent and gave them significant resources. But problems emerged quickly.
Daniel Neuburger from Crystal Dynamics was initially brought in as game director, but he left in February 2022. Around the same time, a significant number of developers departed The Initiative, citing lack of creative autonomy and slow progress. Microsoft then brought in Crystal Dynamics as a full co-development partner rather than just a support studio, essentially restarting the creative vision. This was reported as a full creative reboot in 2022.
Too Many Cooks in the Kitchen
Industry observers noted that Perfect Dark seemed to suffer from too much oversight and not enough clear direction. When you have multiple studios involved, corporate executives weighing in, and constant personnel changes, maintaining a cohesive creative vision becomes nearly impossible. The Initiative was supposed to be an elite studio but ended up feeling more like a design-by-committee nightmare.
Why This Could Work at Take-Two
Take-Two’s track record with giving studios creative freedom is strong. Rockstar Games operates with significant autonomy under the Take-Two umbrella, and 2K’s various studios have historically been allowed to pursue their creative visions. The company tends to take a more hands-off approach compared to Microsoft’s increasingly risk-averse management style.
By starting fresh with a new IP that Take-Two will own from day one, Gallagher and Horton can avoid the pressure of living up to a beloved franchise’s legacy. Perfect Dark has hardcore fans dating back to the N64 era, which adds expectations and scrutiny. A brand new IP lets them take the concepts they were developing and execute them without that baggage.
FAQs
Who announced the news about Take-Two hiring Perfect Dark developers?
Jason Schreier, a veteran gaming journalist who writes for Bloomberg and runs the Game File newsletter, broke the story on December 8, 2025, via his Bluesky social media account. Schreier is known for accurate reporting on the gaming industry and had previously reported on Take-Two’s failed attempt to acquire Perfect Dark.
Why did Microsoft cancel Perfect Dark?
Microsoft cancelled Perfect Dark on July 2, 2025, as part of massive company-wide layoffs affecting 9,000 employees. The game had experienced significant development troubles including personnel turnover, creative reboots, and slow progress. Xbox Games Studio head Matt Booty stated the cancellation reflected a broader effort to adjust priorities within a changing industry landscape.
What is The Initiative and why was it shut down?
The Initiative was a Microsoft-owned game development studio founded in 2018 with the goal of creating big-budget AAA titles. It was shut down on July 2, 2025, after the cancellation of Perfect Dark. The studio operated for seven years without releasing a single game, making it one of Microsoft’s most expensive failed ventures.
Did Take-Two try to save Perfect Dark before the cancellation?
Yes. According to Jason Schreier’s reporting, Take-Two was close to rescuing the Perfect Dark project after Microsoft decided to cancel it. Leadership from The Initiative and Crystal Dynamics spent two months shopping the game to publishers. However, negotiations between Take-Two and Microsoft broke down because they couldn’t agree on who would own the Perfect Dark intellectual property.
Will the new 2K studio make a Perfect Dark game?
No, because Microsoft owns the Perfect Dark IP and characters. However, many industry watchers speculate that the new studio will create a spiritual successor – a game with similar spy-action gameplay, immersive sim mechanics, and near-future setting, just with a different name and original characters.
Who are Darrell Gallagher and Brian Horton?
Darrell Gallagher is a veteran game developer who led the successful Tomb Raider reboot at Crystal Dynamics before founding The Initiative for Microsoft. Brian Horton is a creative director who worked on Tomb Raider at Crystal Dynamics and Marvel’s Spider-Man at Insomniac Games. Both are now Vice Presidents at the new 2K studio.
When will we hear about what the new 2K studio is making?
No timeline has been announced. Starting a new studio and developing a AAA game typically takes several years. Based on industry standards, it could be 2026 or 2027 before we see an official announcement, with a release potentially coming in 2028 or beyond.
What happened to the other developers who worked on Perfect Dark?
When The Initiative was shut down, Microsoft stated they would work with affected staffers to provide severance and support. Developers were encouraged to apply for other positions within Xbox and would receive priority consideration. Crystal Dynamics, the co-development partner, went through multiple rounds of layoffs in 2025.
Conclusion
The gaming industry has a long history of talented developers landing on their feet after cancellations, and this looks like another example of that resilience. Microsoft’s loss is Take-Two’s gain. While fans may never get to play the Perfect Dark reboot that was shown in 2024, they might eventually get something even better – a game made by the same creative minds but without the corporate drama and creative compromises that plagued the original project. Gallagher and Horton clearly have a vision for spy-action gaming in the modern era. Now they finally have the freedom and resources to execute that vision properly. Whatever this new 2K studio creates, the gaming world will be watching closely.