ESO Creator Matt Firor Talks Project Blackbird, Microsoft Cuts

Matt Firor, the founder of ZeniMax Online Studios and the visionary behind The Elder Scrolls Online (ESO), has officially confirmed that the cancellation of his unannounced MMO, codenamed "Project Blackbird," was the reason for his departure from the company. In a candid LinkedIn post on Jan 1, 2026, later shared on Bluesky, Firor broke his six-month silence, revealing that Microsoft's decision to axe the game in July 2025 was the breaking point that ended his nearly two-decade tenure at the studio. He described the scrapped title as the "game I had waited my entire career to create."  

The revelation clarifies the speculation that has swirled since Firor’s abrupt exit during Microsoft’s massive restructuring event last summer. While initial reports linked his resignation to general corporate downsizing, Firor’s new statement pinpoints the loss of Project Blackbird as the direct catalyst. 

'Project Blackbird' and Broken Dreams

He explained that despite internal enthusiasm for the project, the cuts in July 2025 killed the game that he considered his magnum opus. He expressed deep heartbreak for the disbanding of his team, calling them "the most dedicated, amazingly talented group of developers in the industry," many of whom he had worked with for over 20 years.

The cancellation was part of a broader wave of cost-cutting measures by Microsoft’s gaming division in mid-2025, which reportedly terminated roughly 9,000 employees and shuttered initiatives like the Perfect Dark reboot and Everwild. The reported fallout at ZeniMax Online was particularly severe, exposing deeper cultural issues under Microsoft’s ownership. 

The restructuring clearly left a bad taste in the mouths of many veteran developers. Several of Firor’s former colleagues departed to form Sackbird Studios, aiming to build their own multiplayer game on their own terms. However, the context of the layoffs suggests heavy corporate pressure. As Kotaku reported, Xbox game studios were tasked with achieving a controversial 30% profit margin, a difficult target to hit while being mandated to release games for free on Game Pass.

Firor, a veteran who co-founded Mythic Entertainment in 1995 and ZeniMax Online in 2007, is now stepping back from direct development. He clarified that he is currently "advising informally" and fielding questions, but has no immediate plans to establish a new studio. 

While his departure marks a "lost chapter" for innovation at Bethesda’s online arm, his legacy remains secured by the enduring financial success of The Elder Scrolls Online, which continues to generate billions in revenue despite the turbulence behind the scenes.