Former Elder Scrolls Online head explains departure after cancelled Microsoft project

ZeniMax Online Studios co-founder Matt Firor has publicly explained for the first time why he left Microsoft last year, confirming that the cancellation of a major in-development game was the decisive factor behind his exit. Firor, who played a key role in building The Elder Scrolls Online into one of the most successful MMORPGs of the past decade, departed the company in mid-2024 following widespread layoffs and internal restructuring.

In a detailed post shared on 1 January, he reflected on the emotional toll of the decision and the frustration of seeing a long-term creative vision come to an abrupt end. His comments have provided clarity for fans and industry observers who had long suspected that the cancellation of the unannounced Project Blackbird was at the heart of his resignation.

Project cancellation becomes the breaking point

Firor explained that the scrapped title was more than just another development project. It represented what he described as the most personally meaningful work of his career. He confirmed that its termination made it impossible for him to remain at the company.

“Project Blackbird was the game I had waited my entire career to create, and having it cancelled led to my resignation,” he wrote in his LinkedIn post, later shared on Bluesky. The announcement also highlighted his concern and sympathy for the team affected by the shock decision. “My heart and thoughts are always with the impacted team members, many of whom I had worked with for 20+ years, and all of whom were the most dedicated, amazingly talented group of developers in the industry.”

Happy New Year everyone. I’ve been pretty quiet the last six months, but I posted this message on LinkedIn late yesterday just to give everyone an update. I’ll put it here just to make sure it gets around

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— Matt Firor (@thefiror.bsky.social) January 1, 2026 at 9:28 PM

His statement did not directly criticise Microsoft or Xbox leadership, nor did it mention the company by name. However, the tone of his message made clear the depth of the studio’s disappointment. Firor was regarded as a central figure at ZeniMax Online since its founding in 2007, guiding the team through years of development, expansion, releases, and ongoing live-service support for The Elder Scrolls Online.

Fallout across the studio and industry response

Project Blackbird’s cancellation was part of a wider wave of cuts across Microsoft’s gaming division last year, resulting in job losses across multiple internal studios. The decision reportedly hit morale particularly hard at ZeniMax Online, where many staff members had worked together for decades.

Several former employees eventually left to form a new independent studio called Sackbird Studios, where they hope to continue building ambitious online multiplayer experiences. In announcing their plans, the group emphasised their desire to work without what they described as corporate constraints. They stated that, with internal funding and complete creative control, their goal is to create bold, character-driven multiplayer games that are not compromised by large-scale corporate demands.

Reports from Bloomberg previously described Project Blackbird as a large-scale loot-focused shooter that blended features from Destiny with the atmosphere of Blade Runner, while still incorporating deep storytelling and quest structures similar to traditional MMORPGs. The project had reportedly been in development for several years and had reached a stage where senior leadership could play early builds.

A surprising decision despite internal praise

Industry insiders have suggested that the cancellation appeared especially unexpected because Microsoft Gaming head Phil Spencer was said to have been impressed after personally testing the game in early 2024. According to reports, Spencer reacted positively to the experience, which made the eventual shutdown increasingly puzzling to many within the studio.

The move also came at a time when Microsoft’s internal studios were reportedly expected to meet demanding financial targets. Teams were said to be under pressure to reach a roughly 30% profit margin while simultaneously supporting the company’s strategy of releasing first-party titles on Game Pass from launch, where players can access games without an upfront purchase. This tension between creative ambition and financial reality is believed to have influenced several strategic decisions across the division.

For fans of The Elder Scrolls Online and those looking forward to future large-scale online titles from ZeniMax, the cancellation represented a significant missed opportunity. The studio had built a strong reputation for multiplayer storytelling and long-term live service support, leading many players to hope the team would deliver another defining online experience. Firor’s departure has therefore been seen as the end of an important era for both the studio and its creative direction.

Even though Microsoft has not publicly discussed the cancellation in detail, Firor’s statement has given the clearest insight yet into the human impact behind major corporate decisions in the games industry. It highlights the fragile balance between creative ambition, long-term studio planning and the business realities that shape which games ultimately reach players.