ZeniMax Online Studios was among the first-party studios most affected by the Xbox layoffs in both July 2025 and 2026. Last year, the team saw its sci-fi online game Project Blackbird (with related layoffs of a few hundred employees who had been working on it for years) canceled despite then-Xbox CEO Phil Spencer reportedly loving it. The end of Project Blackbird also directly led to the resignation of ZeniMax Online Studios founder Matt Firor, who would later label it as a missed opportunity for Xbox.
Following the cancellation of Blackbird, ZOS refocused on its prize jewel, the popular MMORPG The Elder Scrolls Online, and shifted its live service strategy from an expansion model to a seasonal model. This actually freed the development team from the stale content pipeline they had been tied to and produced an intriguing 2026+ roadmap, which included new content systems and even experiences like naval battles. Season One had just dropped when the new wave of Xbox-mandated cuts hit ZeniMax Online Studios, forcing the studio to admit the roadmap would have to be revised.
Now, speaking to the BBC, Senior Encounter Designer Morgan Goin, who was among the laid-off employees, makes it clear that the layoffs scale means the pace of Elder Scrolls Online updates will have to slow down considerably.
We're not going to be able to put out the amount of content at the speed that we were… or anything approaching that.
Goin, who sat on the studio's bargaining committee, also revealed how it felt to deal with the rumors that emerged way before the layoffs actually landed:
Blindsided. We knew something was going to happen to somebody, but not who or how much. What we were left with was just a lot of uncertainty for about a month.
It's not like Elder Scrolls Online was doing badly, either. This is a game that surpassed $2 billion in lifetime revenue a long while ago and is still popular. Indeed, speaking to Game Developer, an anonymous source from within ZOS said the metrics were trending upward:
All of the information that was ever visible to us out of those numbers meetings—out of the the monthly staff meetings—were that we were doing fine. You know, we're paying for ourselves. We were improving on the metrics Microsoft wanted us to improve on.
The same source adds that no amount of external contractors will help when it comes to creating new content for a game powered by a custom in-house engine, as it would take at least six months for newcomers to even know what they're doing.
As a long-time player of Elder Scrolls Online, I find this incredibly unfortunate and uncalled for, as explained above. Asha Sharma is said to be betting heavily on IPs like Elder Scrolls and Fallout, but gutting the studio that made a successful live service game based on the former doesn't seem like a good start at all.
About the author: With over two decades of experience in gaming journalism, Alessio Palumbo has led the gaming vertical at Wccftech since August 2015. He started working at a young age for Italian websites like Everyeye.it, Gamestar.it, Nextgame.it, and Multiplayer.it before kickstarting the indie English-language publication Worlds Factory as its founder and Editor in Chief. In the last decade, he has coordinated the overall output of Wccftech's gaming section, managed PR relations, assigned reviews, produced daily news coverage, edited gaming content as needed, and delivered game reviews. Arguably, his trademark content is the long series of exclusive developer interviews that have been cited by Wikipedia and by the biggest news media and gaming publications. His passion for technology also makes him knowledgeable when it comes to gaming hardware and tech. His favorite genres include RPGs, MMORPGs, and action/adventure games.
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