In July 2025, Microsoft carried out a broad restructuring that affected roughly 9,000 employees, with significant impact inside its gaming divisions. The company confirmed the cuts on July 2, 2025, and industry observers characterized the move as a summertime ‘bloodbath’ that coincided with the cancellation of several high-profile projects. Among the casualties were Rare’s Everwild, an unannounced MMO at ZeniMax Online Studios codenamed Blackbird, and the planned Perfect Dark reboot. The upheaval also encompassed layoffs and reassessments across ZeniMax’s portfolio, setting the stage for leadership changes that would reverberate through the company’s online and multi-platform ambitions.
Former Elder Scrolls Online director Matt Firor had helped steer ZeniMax Online since its 2007 founding and remained a prominent figure within the studio network. In the wake of the layoffs and project cancellations, Firor departed ZeniMax Online after nearly two decades with the company. Firor later stated that the decision to leave was driven by the cancellation of Blackbird, the unannounced MMO that had been a cornerstone of his long-term creative vision. In a January 1 message posted on LinkedIn, he wrote that “Project Blackbird was the game I had waited my entire career to create, and having it canceled led to my resignation,” and noted his empathy for the affected staff, many of whom had worked alongside him for 20 years.
Firor clarified that he is not presently involved in leading any projects being assembled by former ZeniMax personnel, including Sackbird Studios, a new venture formed in October 2025 by a group of developers who previously worked on The Elder Scrolls Online and Project Blackbird. “I am advising some of them informally, but I am not leading them,” he wrote. “They are in good hands with their respective leaders and I can't wait to see what they come up with.” The creation of Sackbird signals a partial shift toward independent studio efforts built from the ZeniMax ecosystem, even as Firor himself contemplates his next steps.
Firor has said that his current path involves advising and investing in small teams and startups, but he has not yet seriously contemplated spinning up a new development studio. In the months that followed, the industry has watched how Firor’s departure and Blackbird’s cancellation will affect the culture and output of ZeniMax Online, a studio known for its long-running online RPG and ongoing live-service support.
For ZeniMax, the broader corporate messaging around The Elder Scrolls Online shifted as well. Jo Burba, the new ZeniMax CEO appointed in 2025, insisted in August that ESO “isn’t going anywhere.” Yet morale inside the publisher’s live-game studio network has been described by a senior QA tester as deteriorating in the wake of the cuts, with Autumn Mitchell referring to the workplace as a “carcass of workers” after the layoffs.
The combination of executive turnover, project cancellations, and the emergence of independent ventures like Sackbird underscores a period of significant recalibration for ZeniMax and its parent company. Firor’s resignation underscores a broader tension between ambitious, long-horizon online projects and the immediacy demanded by corporate restructuring in a volatile industry.
As detailed in the public record surrounding the 2025 layoff cycle, the cancellation of Blackbird stands as the defining flashpoint for Firor’s exit. While ESO’s future remains stable on the surface, the internal climate and the company’s strategic priorities are under intense scrutiny from both developers within the network and players who have built communities around the franchise. The new wave of independent studio formation within the ZeniMax ecosystem suggests a potential shift in how the publisher cultivates and retains creative leadership in a landscape where large-scale online franchises require sustained, long-term investment.
Industry observers will be watching closely how Sackbird and related efforts unfold in the coming years, and whether Firor’s stance on advising rather than leading will redefine the path for veteran developers seeking flexible, smaller-scale creative endeavors in a market dominated by live-service expectations. In the near term, the emphasis remains on stabilizing teams, preserving the quality of The Elder Scrolls Online, and navigating the delicate balance between ambitious new projects and the organizational realities of a sprawling, publicly traded games business.
