A Risky MMO Meets a Changing Market
More information has been released about the changes happening at Zenimax since Microsoft’s layoffs earlier this year. Along with job cuts, a long-term project was cancelled: Blackbird, an MMO that had been in development for seven years. At first glance, it seems odd that Microsoft would cancel a nearly finished project, especially after executives praised its demo, only for Zenimax leadership to later confirm new games are in development. But the two aren’t actually in conflict.
Blackbird wasn’t cancelled because it was bad. It was cancelled because it was risky.
The MMO market has been stagnant for decades. Players are burnt out on live-service models. Subscription fees feel like a joke to most of today’s gamers, and the rise of digital-only gaming has created a growing backlash against not owning what you buy. Even the best-designed MMO struggles to thrive in an environment where fewer and fewer people want to commit to one. Microsoft already owns World of Warcraft and ESO. Do they need a third? For Microsoft, Blackbird looked less like a bold new opportunity and more like an expensive gamble that would come due just as the market was walking away.
The Weight of Microsoft’s Layoffs
Context matters here. Microsoft cut more than 15,000 jobs in 2025, shifting billions into AI investment. This wasn’t about financial distress. The company is wildly profitable. It was about positioning itself in the global AI race, where falling behind even a little could mean losing dominance for decades. “Cost-cutting,” in this sense, doesn’t mean less spending. It means moving money out of risky projects and into areas with clearer returns, like AI infrastructure, Game Pass, and established IPs such as Fallout.
From that angle, Blackbird was doomed by timing. The project was about to enter full production, the most expensive phase of development, just as Microsoft was making deep cuts and reallocating resources. A new MMO with no guaranteed audience was the wrong kind of bet in 2025.
Leadership Shifts Inside Zenimax
The fallout from Blackbird’s cancellation reshaped Zenimax Online Studios. Longtime president Matt Firor departed after 18 years, replaced by Jo Burba. Rich Lambert stepped into a broader role as Studio Game Director, while Nick Giacomini took over as Game Director for Elder Scrolls Online. These changes signaled both a response to the layoffs and a new direction for the studio.
What’s notable is Lambert’s own comments. He’s been clear that he wants Zenimax to make other games beyond ESO. He couldn’t share details yet, but his statement doesn’t sound like a studio shutting down. It sounds like one repositioning itself for a different kind of future. Smaller projects, single-player games, and co-op titles may now be on the table, all safer bets than a giant new MMO.
The Future of ESO
As for Elder Scrolls Online itself, the cadence of annual expansions is over. The focus will shift to maintenance, bug fixes, and quality-of-life updates rather than big new regions. That has fueled speculation that ESO could enter “maintenance mode,” though the studio insists the game is still central to its plans. With more than 25 million players over its lifetime, ESO isn’t going anywhere, but it may not see the same ambitious growth it once did.
Why Cutting Blackbird Makes Sense
It’s easy to feel frustration at the loss of a project that could have shaken up the MMO market. I feel for the developers whose work won’t be seen and for the players who hoped for something new. The truth is, Blackbird’s biggest obstacle wasn’t its quality. It was the market itself.
Players don’t flock to MMOs the way they once did. Live-service fatigue is real. Subscription fees are unappealing. Digital ownership concerns are reshaping consumer trust. Against that backdrop, Microsoft’s choice to cancel a project about to enter its most expensive phase looks less like a blunder and more like pragmatism.
Blackbird may have been a good game, but good isn’t enough when the market has moved on. Microsoft’s decision to cancel it wasn’t shortsighted. It was strategic. By cutting a risky project, the company freed Zenimax to explore new, more viable directions. If that leads to fresh single-player or co-op experiences, I’m more than curious to see what comes next.
