A new MMO in development at Elder Scrolls Online studio ZeniMax has been cancelled as Microsoft puts thousands more people out of work

Microsoft's latest round of layoffs has seemingly resulted in the cancellation of a new MMO that was in the works at Elder Scrolls Online developer ZeniMax Online Studios.

The cancellation of the game, codenamed Blackbird, was first reported by Jason Schreier of Bloomberg, who said on Bluesky that the unannounced MMO—an entirely original project—had been in development since 2018.

There's been no official announcement at this point, but multiple ZeniMax employees have indicated on LinkedIn that the report is accurate. Lead engineer Aaron Barnett, whose profile indicates he's "open to work," posted a message quoting and linking to Schreier's message, while senior character artist Eric Hall, who has also apparently been laid off, wrote separately, "Looks like the project I've been working on for the past 5+ years has been cancelled." Senior producer Chris Linn also wrote that "our amazing MMO project was just cancelled," and he is out of job.

Principal economy designer John Hartzell hinted at disarray in the layoff process in his own confirmation of the layoffs: "My Slack [corporate chat account] was deactivated as I write this so I assume my time here is over as well."

Unfortunately I am a part of the mass layoffs at Xbox. Our incredible new MMORPG at ZeniMax Online Studios has been cancelled.

— @johnhartzell.bsky.social (@johnhartzell.bsky.social.bsky.social) 2025-07-02T18:15:32.496Z

It's not yet known how many people at ZeniMax and other Microsoft-owned studios are being put out of work, but game director Ben Jones indicated that the unannounced MMO's entire development team has been let go. Massively Overpowered reported in 2022 that the development team on the game had grown to 200 people, and ZeniMax was continuing to recruit after that—in fact the studio's website still links to a "kickass new projects" page that encourages people to "join us and make your mark on an incredible new project."

Microsoft announced the layoff of approximately 9,000 employees earlier today, many of whom worked in the company's gaming division. Xbox boss Phil Spencer said in a memo to employees that the cuts "come at a time when we have more players, games, and gaming hours than ever before," and the Xbox "platform, hardware, and game roadmap have never looked stronger," which is an absolutely miserable thing to say when you're putting literally thousands of people out of work and something I hope we all remember the next time we're tempted to get excited about his latest t-shirt or well-stocked shelf.

Microsoft reported a net income of $88.1 billion in 2024, a 22% increase over the $72.3 billion profit it recorded in 2023, in case you're curious about these things.

Rare's Everwild project, first announced in 2019, has also reportedly been cancelled as a result of the Microsoft layoffs.

I've reached out to ZeniMax for comment and will update if I receive a reply.