Avalanche Studios Considers Closure Of Liverpool Office After Contraband Cancellation
Avalanche Studios Group — the Swedish developer behind Just Cause, Rage 2, and Generation Zero — has announced the closure of its Liverpool studio in the UK. The news arrived via Avalanche’s official “Studio Update” (September 30, 2025), where the company confirmed it would be restructuring in the wake of Contraband’s development being halted.
For Avalanche, Liverpool was a relatively new chapter, opened in 2020 as part of the studio’s global expansion. But five years later, with Microsoft backing out of Contraband and Avalanche cutting costs, the UK outpost has become a casualty of shifting priorities. This marks another contraction for Avalanche after closures in Montreal and New York last year, underscoring the turbulence the mid-sized studio has faced.
Why Avalanche Will Close Its Liverpool Studio
Avalanche Liverpool was part of the developer’s push to diversify talent hubs outside of Sweden. The UK location worked on supporting larger projects and served as a foothold into one of Europe’s most vibrant game development communities.
But Avalanche’s statement makes clear the decision was about sustainability:
The company described the closure as a move to “ensure long-term stability.”
The update linked it with broader restructuring, rather than performance at Liverpool specifically.
Still, the timing lines up squarely with Contraband’s cancellation, a blow that appears to have forced Avalanche to cut deeper than planned.
By shutting Liverpool, Avalanche is retreating from its expansion era and concentrating resources back into its Swedish HQ and established European offices.
Contraband: The Project That Fell Through
Announced in 2021 as part of Xbox’s big showcase, Contraband was pitched as a co-op smuggling adventure set in a 1970s open world. With Avalanche’s reputation for systemic sandbox gameplay (Just Cause’s chaos being the most famous), Contraband was seen as a strong fit for Game Pass and Xbox’s first-party lineup.
But after years of silence, Avalanche confirmed in August 2025 that active development on Contraband has stopped. The company used carefully chosen language (“evaluating its future”) but in industry terms, the project is effectively cancelled.
Industry insiders have pointed to Microsoft’s sweeping 2025 layoffs and cost-cutting across its gaming division as the trigger. Avalanche, as a partner rather than a wholly owned studio, had little leverage to shield its project when the axe came down.
For Liverpool, which was tied to the Contraband effort, the cancellation proved decisive. Without a major project to justify its staffing and overhead, the UK office was shut.
The Wider Avalanche Restructure
Liverpool’s closure doesn’t stand alone; it’s part of a longer downsizing trend at Avalanche:
In 2024, Avalanche closed its Montreal and New York studios, laying off around 50 employees.
The Liverpool closure in 2025 follows as the third office cut in less than two years.
The company insists this is about streamlining operations and securing a sustainable future, but it’s clear the cancellations and cost pressures are reshaping the group.
Avalanche Studios Group now looks much more centralized, relying heavily on its Stockholm HQ and long-established Malmö team.
What This Means for Avalanche’s Future
The Liverpool closure sends several signals about where Avalanche stands and where it’s headed:
Retreat from risky partnerships
Contraband was high-risk, high-reward — a massive open-world co-op game tied to a single publisher. Avalanche may now lean toward more modestly scoped projects it can finance more independently.
Stronger focus on proven IP
With Just Cause as its flagship franchise, and cult hits like Generation Zero still alive, Avalanche has IP that can sustain it if leveraged carefully.
European consolidation
By concentrating back in Sweden, Avalanche reduces global overheads and aligns talent closer to its leadership.
Potential talent drain
UK closures risk losing senior devs who might move to competitors, further challenging Avalanche to maintain creative momentum.
What To Take Away
Avalanche Studios has closed its Liverpool (UK) office, confirmed in the September 30, 2025 studio update.
The closure follows the halted development of Contraband, Avalanche’s planned Xbox exclusive.
Avalanche has now closed three international offices in two years: Montreal, New York, and Liverpool.
The studio is consolidating in Sweden, aiming for long-term stability after a turbulent period.
To Wrap Things Up
The shutdown of Avalanche Liverpool marks the end of a short but important chapter in the studio’s history. Opened in 2020, the UK branch was meant to expand Avalanche’s creative footprint. Instead, five years later, it becomes a victim of larger industry economics: cancelled projects, publisher cost-cutting, and the difficult realities of AAA game development in 2025.
Avalanche will live on, with Just Cause and other projects still anchoring its future, but the closure underscores how fragile even established studios can be when a major project falls through. For UK developers, it’s another reminder of how volatile international expansion can be when tied to the fortunes of a single blockbuster. What do you think of this latest development? Let us know in the comments.
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