A developer studio that belongs to ZeniMax Online Studios, the makers of Elder Scrolls Online, is now losing hundreds of employees and the new MMORPG they have been working on seemed to be doing quite well.
Who is it about? Following the major layoff wave from Microsoft, the cancellation of the new MMORPG from ZeniMax Online Studios was also announced. They had been developing an AAA MMORPG parallel to Elder Scrolls Online since 2018.
Little was known; job postings revealed they were developing their own engine, and the project was assigned the codename “Blackbird.” According to anonymous sources IGN reported, the MMORPG was supposed to take place in a sci-fi universe.
Yet players will not get to see the MMORPG just like its employees.
Here you can see what is currently happening in Elder Scrolls Online:
Hundreds of positions cut, despite good development
How was the development going? The gaming magazine IGN talked to several anonymous sources who supposedly have insights into the project. However, it is unclear who exactly they are. The sources report that the team at ZeniMax Online was actively working to advance the development from the concept phase to full production. The development was going accordingly well.
How is a video game actually developed?
A video game is developed in various phases. In the conception phase, the framework of the game is established from the initial idea to the prototype of core mechanics. In full production, the features of the game are fully developed. This is followed by alpha and beta phases aimed at testing and improving features as well as addressing performance and bugs in the game before it is finally released.
According to the report, Xbox had already approved ramping up development and had also deployed some employees from Elder Scrolls Online and the closed Arkane Studios as reinforcements.
IGN reports, citing anonymous sources, that Matt Booty, Head of Xbox Game Studios, allegedly said in a meeting regarding the closures of “Arkane Austin,” “Tango Gameworks,” and “Alpha Dog Games,” that they are also there to meet the staffing needs for other studios including ZeniMax Online Studios.
The production was reportedly on a good path, and the new MMORPG was indeed supposed to be realized. However, everything changed on July 2.
What led to the shutdown? The exact circumstances of the layoffs are still unknown. Industry insider Jason Schreier reports on BlueSky that chaotic conditions exist at ZeniMax Online Studios. According to him, employees reportedly have no access to their work profiles on Slack while they themselves haven’t learned of their layoffs yet.
According to the report from IGN, all employees who worked on the new MMORPG have been laid off. This affects hundreds of positions at ZeniMax Online Studios and likely also includes employees who were transferred from other teams. Even the head of ZeniMax Online Studios is clearing his desk.
The sources from IGN have informed them that they learned of the layoffs from the media for the first time. According to the report, they still do not know how extensive the cuts are and who is affected. The anonymous sources also confirm Jason Schreier’s reports that first came the blocking of Slack profiles and only later did the HR department inform them about the layoffs.
What the future looks like for ZeniMax Online Studios and whether Elder Scrolls Online is also affected is still unclear. The MMORPG set in the Elder Scrolls universe is still very popular among players and ranks among the largest on Steam: The 10 MMORPGs with the most players on Steam in July 2025
