What felt like ages ago was only 2020 when Microsoft announced the acquisition for ZeniMax Media. However, there has only been more disheartening news for the publisher as time went on at its new home. Just last year in 2024, it was confirmed that studios such as Arkane Austin, Alpha Dog Games, Tango Gameworks, and Roundhouse Studios were to close. And, this week has only put salt in the wound.

Affecting internal Xbox Game Studios teams, it is no different. It has already been reported that The Initiative is to close its doors at the Santa Monica studio. This includes the reboot for Perfect Dark to be canceled. Additionally, Microsoft also confirmed that Rare’s Everwild is meeting the same fate. In response, veteran developer Gregg Mayles is set to depart from the studio after 35 years.

Through the grapevine on Bluesky, recognized insider Jason Schreier has revealed that Zenimax Online Studios has been hit subsequently with the recent layoffs. This is said to shutter the ongoing work on its new AAA project ‘Blackbird’. It was revealed a new title was in development back in 2020, and is now confirmed to be canceled as well. Leading engineer Aaron Barnett corroborates the reporting via a post on LinkedIn.

BREAKING: The new MMORPG project from Zenimax Online Studios, maker of Elder Scrolls Online, has been canceled as part of the Xbox layoffs, sources tell Bloomberg News. The project, code-named Blackbird, had been in development since 2018. Still more news to come this morning.

Jason Schreier (@jasonschreier.bsky.social) 2025-07-02T15:05:30.540Z

On X, the official Zenimax Online Studios account has revealed that president Matt Firor is to exit the developer later this month. “After more than 18 years leading ZeniMax Online Studios, I’ll be stepping away later this month. The studio and The Elder Scrolls Online will be in great hands under the direction of new Studio Head, Jo Burba along with Executive Producer, Susan Kath and Game Director, Rich Lambert.

“Together, this leadership team has spearheaded many of ESO’s biggest ideas and expansions and will continue to make this game something we’re all proud of. While I won’t be working on the game anymore, I will be cheering you on and adding to the thousands of hours I’ve already spent in-game. There are many more stories to be told, adventures to be had, and I know this amazing community will carry that shared legacy and success forwards.”

What surprises you most about this statement from the developer?

Nick Moreno Content Writer

Nick has over a decade of video game journalism under his belt. Outside of writing about trending & indie releases, he has also provided coverage at multiple events across the United States including Penny Arcade Expo & E3.

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