Xbox is canceling Contraband, announced in 2021 from Avalanche Studios (Just Cause), after four years of radio silence, sources tell Bloomberg News. This news arrives weeks after a mass layoff in which Xbox canceled several other big titles. - Jason Schreier
So, how does this work? Were people actually developing a game that will never be seen? Or did they likely stop working on this years ago and just forgot to tell the world?
The announcement on Avalanche’s website says "Active development has now stopped […] ", so, the former.
At the time it was announced, money was cheap to borrow, so a trailer like this came out when it was way too soon to let customers know about it but exactly the right time to entice new employees to work on your new project, so they were staffing up to make that game. They probably were working on it for the past four years; Avalanche hasn’t had a release since it was announced.
Well since there has been absolutely nothing revealed since, I can only guess and speculate. But I would say the most likely scenario is it was in active development hell.
Like, developers were working on it, but there were probably major problems that were holding them up. Perhaps they restarted development due to some factor. If the game was originally going to be a PvEvP looter shooter, for example, that plan may have changed after seeing the severe negative public reception to that genre (except for streamers). It may have been planned as a live service game but then Concord happened and developers decided to change everything because they were worried the same could happen to their game. Maybe some of the developers wanted a “realistic” depiction of the 1970s and other developers wanted a “sanitized” depiction and there was infighting preventing the game from progressing.
My point is, there are a lot of way that there could have been active development with no actual progress. But since nothing has been shown since the announcement trailer ( a render, not gameplay), I can say with some level of confidence that it likely had no meaningful progress in terms of gameplay development. Otherwise, we would have seen it. 4 years is a long time to spend with no updates just to be cancelled. If there was progress, the game should have been finished by 4 years.