Elder Scrolls Online Dev Cancels Secret MMO, Studio Head Exits Amid Microsoft Layoffs
▼ Summary
– Matt Firor, head of ZeniMax Online Studios (ZOS), has stepped down following the cancellation of an unannounced MMO unrelated to Fallout or The Elder Scrolls.
– The canceled MMO had a sizable team, which was cut as part of broader Microsoft layoffs, with Joseph Burba named as Firor’s replacement.
– Microsoft also canceled Rare’s Everwild and the Perfect Dark reboot, closed The Initiative studio, and halted several unannounced projects.
– Microsoft has laid off thousands of gaming staff since acquiring Activision Blizzard, including 6,000 employees in May 2024.
– Xbox boss Phil Spencer acknowledged the difficulty of these decisions but emphasized the need for sustainable business growth.
The gaming industry faces another wave of upheaval as ZeniMax Online Studios cancels its secret MMO project and loses its longtime leader amid broader Microsoft layoffs. Matt Firor, the studio head behind The Elder Scrolls Online, has stepped down after 18 years, marking the end of an era for the developer. His departure coincides with the abrupt termination of an unannounced multiplayer game, a fresh intellectual property unrelated to Fallout or The Elder Scrolls, which had been in development with a dedicated team now affected by job cuts.
Jill Braff, overseeing Bethesda and ZeniMax, confirmed the leadership transition in an internal memo. Joseph Burba, a veteran with over two decades in the industry and 13 years at ZeniMax Online Studios, will take Firor’s place as studio director. Braff praised Firor’s contributions, calling The Elder Scrolls Online one of the most enduring MMOs under his guidance. The memo also acknowledged the broader impact of Microsoft’s restructuring, emphasizing support for departing employees.
The canceled project was among several undisclosed titles axed as part of Microsoft’s strategic realignment. Matt Booty, head of Xbox Game Studios, referenced these cuts in a separate communication, confirming the shutdown of Perfect Dark and Everwild, as well as the closure of The Initiative. Booty stressed the need to prioritize resources while maintaining a robust pipeline of over 40 active projects.
Microsoft’s gaming division has faced relentless downsizing since its $69 billion acquisition of Activision Blizzard. Earlier layoffs in 2024 affected nearly 2,000 employees, followed by studio closures at Arkane Austin and Tango Gameworks. Additional cuts in September and May brought the total reductions to 6,000 jobs, roughly 3% of Microsoft’s workforce. Phil Spencer, head of Xbox, previously described these decisions as painful but necessary for long-term sustainability.
The timing is particularly striking as Microsoft prepares for next-generation Xbox consoles and a prominent showcase at gamescom. Industry watchers speculate whether these layoffs signal a shift toward fewer, higher-budget projects or further consolidation under Xbox’s expanding umbrella.
For now, the focus remains on supporting displaced teams while navigating an increasingly competitive market. The legacy of Firor’s leadership at ZeniMax Online Studios, and the abrupt end to its mystery MMO, underscores the volatile reality of modern game development.
Image credit: Christian Petersen/Getty Images
(Source: IGN)