The new MMO from the Elder Scrolls Online developers would reportedly have been a sci-fi noir affair in which players swing around tall buildings on grappling lines, and do aerial dashes while shooting and looting. Call it Blade Runner Spider-Man. Call it Destiny 2077. Call it whatever you like, frankly, because it has been abandoned as part of wider layoffs at parent company Microsoft, the outfit that made tens of billions of dollars in profit this past financial quarter, yet has decided to jettison thousands of staff in the name of “discipline” and “continued success”.
The report in question is from Bloomberg, where Jason Schreier offers a brief account of the Blackbird project’s final hours. Previously codenamed Kestrel, it had apparently been in development since 2018, and was a third-person shooter with looting elements and a heavy emphasis on vertical movement – grapples, double-jumps, aerial dashes, and wall-climbing. According to Bloomberg, ZeniMax Online Studios envisaged the game as the beginning of a “new franchise”, running alongside Elder Scrolls Online, which has been a wobbly endeavour at times but is currently quite the success story, earning a reported $2 billion in total revenue by 2024.
By March this year, the development team had reportedly expanded to 300 people, and Xbox executives Phil Spencer and Matt Booty are said to have been impressed by a demo they sampled in March 2025. But the positivity was not to last. According to Bloomberg’s sources, staff were shocked to learn this week that ZeniMax Online Studios head Matt Firor had left the company, and that project Blackbird had been “indefinitely shelved”.
Many of those employees now face redundancy, pending the outcome of a haggle over things like severance packages between Microsoft and their union. A Microsoft spokesperson has confirmed this much to Bloomberg, commenting “represented employees are awaiting information regarding these proposed impacts and next steps, which are subject to negotiations with the union”.
The scale of Microsoft’s recent earnings make this week’s layoffs feel like an enormous practical joke. Still, I can guess at elements of the executive reasoning here. Live service games are both costly and increasingly risky, because there is so much competition. Schreier also claims that ZeniMax Online Studios were developing the game’s engine technology alongside the game itself, which in my experience covering such things is a hard act to pull off.
Still, assuming Bloomberg’s reporting is legit, the fact remains that the C-suits liked it and Microsoft seem to have doubloons to spare right now. Best of luck to everybody affected.
