This is Terminally Online: PC Gamer’s dedicated column exploring the multifaceted world of MMOs. In this space, I delve into the genre’s intricacies, engage with fellow enthusiasts, and occasionally invite guest writers to share their insights. While I often approach these discussions with a hint of skepticism, it’s important to acknowledge that MMOs are not on the brink of extinction. With titles like Guild Wars 3 on the horizon and established games maintaining loyal player bases, the landscape remains vibrant. However, recent developments regarding Xbox layoffs have cast a shadow over this optimism, particularly concerning Zenimax Online Studios (ZOS), the creators behind The Elder Scrolls Online (ESO), who appear to be bearing the brunt of corporate decisions.
Left hook
The cancellation of Project Blackbird, Zenimax’s ambitious new venture, has left many in the community disheartened. Although it’s uncertain whether this project would have revitalized the MMO market, the industry certainly craves fresh offerings. After over five years of development, this initiative was described by its former leader, Matt Firor, as a significant gamble. The project had garnered attention from Microsoft Gaming’s then-CEO Phil Spencer and was tentatively set for a 2028 release. The loss of such a substantial investment, alongside the elimination of 62 jobs as reported in a WARN notice, is undeniably tragic.
Earlier this year, I had the opportunity to converse with executive producer Susan Kath, who expressed optimism about the team’s morale and their commitment to the game’s future. Game director Nick Giacomini echoed this sentiment, emphasizing their enthusiasm for the ongoing evolution of ESO. The studio had recently embraced a seasonal model and implemented numerous quality-of-life improvements, reminiscent of the resurgence seen in World of Warcraft following its own challenges.
Right hook
Fast forward to less than six months later, and the situation has drastically changed. Reports indicate that approximately 60% of Zenimax Online Studios has faced layoffs between 2025 and 2026, with 213 of those occurring just this week. The abrupt departure of long-standing team members has left many employees reeling, grappling with the loss of familiar colleagues and the disruption of established workflows. Notably, these layoffs coincided with the launch of ESO’s first season, raising eyebrows over the timing.
“To believe that a game that historically brings you in 6 million annually somehow isn’t profitable seems absolutely absurd to me.”
Imagine the scenario: after enduring previous layoffs, the team rallies, driven by a newfound sense of purpose and excitement. Just days before the release of their hard work, they face the harsh reality of job cuts. This is particularly disheartening given that ESO has generated over billion in revenue since its inception, averaging an impressive 6 million annually. While fluctuations are expected in any business, the decision to cut a thriving team seems misguided, especially when player feedback has been overwhelmingly positive regarding recent changes.
- “What the heck man. ESO was really getting a second wind,” comments user u/PompeiiSketches.
- “The game seemed to be on the up and up, what happened?” asks u/Crimsonmaddog44.
- “Absolute insane behavior to make cuts to the team that has gotten tons of players (myself included!) back into engaging with the game,” states u/Ion_bound.
In a forum post, one user expressed their dismay, stating, “I just came back because of your roadmap for the future, and knowing now the people working on it are getting cut by a company that’s billions in the green is really heartbreaking.” Another echoed similar sentiments, highlighting the disappointment in the timing of these layoffs amidst a period of renewed hope for the game.
Holding shares
It is essential to address the treatment of Zenimax Online Studios as a troubling reflection of corporate priorities. The studio was not only profitable but also poised for a bright future, having recently recovered from the abrupt cancellation of a major project. With ESO generating substantial revenue for Microsoft, the decision to implement such drastic cuts raises questions about the company’s strategic vision.
As Microsoft invests heavily in ambitious projects, including AI initiatives, the fate of a well-established MMO like ESO hangs in the balance. Should the game falter, it would represent a significant loss in a genre that is already facing challenges. Zenimax Online Studios and its dedicated team deserve recognition and support, particularly during this critical juncture in their journey.
The Elder Scrolls Online’s developer deserved better than to get sucker-punched by Microsoft twice in two years
This is Terminally Online: PC Gamer’s dedicated column exploring the multifaceted world of MMOs. In this space, I delve into the genre’s intricacies, engage with fellow enthusiasts, and occasionally invite guest writers to share their insights. While I often approach these discussions with a hint of skepticism, it’s important to acknowledge that MMOs are not on the brink of extinction. With titles like Guild Wars 3 on the horizon and established games maintaining loyal player bases, the landscape remains vibrant. However, recent developments regarding Xbox layoffs have cast a shadow over this optimism, particularly concerning Zenimax Online Studios (ZOS), the creators behind The Elder Scrolls Online (ESO), who appear to be bearing the brunt of corporate decisions.
Left hook
The cancellation of Project Blackbird, Zenimax’s ambitious new venture, has left many in the community disheartened. Although it’s uncertain whether this project would have revitalized the MMO market, the industry certainly craves fresh offerings. After over five years of development, this initiative was described by its former leader, Matt Firor, as a significant gamble. The project had garnered attention from Microsoft Gaming’s then-CEO Phil Spencer and was tentatively set for a 2028 release. The loss of such a substantial investment, alongside the elimination of 62 jobs as reported in a WARN notice, is undeniably tragic.
Earlier this year, I had the opportunity to converse with executive producer Susan Kath, who expressed optimism about the team’s morale and their commitment to the game’s future. Game director Nick Giacomini echoed this sentiment, emphasizing their enthusiasm for the ongoing evolution of ESO. The studio had recently embraced a seasonal model and implemented numerous quality-of-life improvements, reminiscent of the resurgence seen in World of Warcraft following its own challenges.
Right hook
Fast forward to less than six months later, and the situation has drastically changed. Reports indicate that approximately 60% of Zenimax Online Studios has faced layoffs between 2025 and 2026, with 213 of those occurring just this week. The abrupt departure of long-standing team members has left many employees reeling, grappling with the loss of familiar colleagues and the disruption of established workflows. Notably, these layoffs coincided with the launch of ESO’s first season, raising eyebrows over the timing.
Imagine the scenario: after enduring previous layoffs, the team rallies, driven by a newfound sense of purpose and excitement. Just days before the release of their hard work, they face the harsh reality of job cuts. This is particularly disheartening given that ESO has generated over billion in revenue since its inception, averaging an impressive 6 million annually. While fluctuations are expected in any business, the decision to cut a thriving team seems misguided, especially when player feedback has been overwhelmingly positive regarding recent changes.
In a forum post, one user expressed their dismay, stating, “I just came back because of your roadmap for the future, and knowing now the people working on it are getting cut by a company that’s billions in the green is really heartbreaking.” Another echoed similar sentiments, highlighting the disappointment in the timing of these layoffs amidst a period of renewed hope for the game.
Holding shares
It is essential to address the treatment of Zenimax Online Studios as a troubling reflection of corporate priorities. The studio was not only profitable but also poised for a bright future, having recently recovered from the abrupt cancellation of a major project. With ESO generating substantial revenue for Microsoft, the decision to implement such drastic cuts raises questions about the company’s strategic vision.
As Microsoft invests heavily in ambitious projects, including AI initiatives, the fate of a well-established MMO like ESO hangs in the balance. Should the game falter, it would represent a significant loss in a genre that is already facing challenges. Zenimax Online Studios and its dedicated team deserve recognition and support, particularly during this critical juncture in their journey.