The immedate aftermath of Microsoft confirming that it would eliminate roughly 9,000 roles—about 4% of its global workforce—as part of a company-wide effort to streamline operations and reallocate resources to high-priority areas like cloud and gaming, we already have som collateral as the layoff impacted the development of two not-so-secret projects.
For a recap, Microsoft’s gaming arm was notably impacted, with cuts spanning:
- Xbox central teams and global operations
- Mobile-gaming giant King (Candy Crush)
- ZeniMax Media’s marketing and development staff across Europe and the U.S.
These reductions follow earlier rounds in January, May and June, underscoring an ongoing pivot toward a leaner structure and greater agility.
Zenimax Online’s “Project Blackbird” Shelved
In the wake of the layoffs, Microsoft canceled the long-gestating MMORPG at ZeniMax Online Studios, code-named Project Blackbird. Key details:
- Development began in 2018 under ZeniMax Online, creators of The Elder Scrolls Online
- Blackbird represented the studio’s next major online IP after over seven years of work
- Cancellation was confirmed by Bloomberg via sources familiar with the Xbox cuts
That means after years of concepting, prototyping and testing, the team’s resources will be redirected toward existing live services and new first-party content.
Rare’s Everwild Cut Loose
One of Rare’s most mysterious projects, Everwild, was also canceled as part of the gaming-division layoffs:
- First revealed in late 2019 as a nature-driven “eternal” multiplayer experience
- Promised to blend magic, exploration and community without traditional combat
- Confirmed canceled by VGC, Eurogamer sources and Bloomberg’s Jason Schreier following the Xbox job reductions
After nearly a decade of fits and starts—including a complete restart in 2021—Everwild will no longer proceed.
| Project | Studio | Codename | Started | Canceled | Notes |
|---|---|---|---|---|---|
| Project Blackbird | ZeniMax Online Studios | Blackbird | 2018 | Jul 2 2025 | Cancelled due to Xbox-division layoffs |
| Everwild | Rare | N/A | 2019 | Jul 2 2025 | Cancelled amid layoffs after troubled, decade-long dev |
What’s Next for Microsoft Gaming
With Blackbird and Everwild axed, Microsoft Gaming will likely:
- Double down on Bethesda and Activision Blizzard franchises
- Push hardware innovation, including next-gen consoles and handhelds
- Expand cloud gaming partnerships and infrastructure investments
The layoffs and cancellations signal a tougher era for big-budget experimental IP—at least until emerging technologies deliver clearer paths to profitability.
Microsoft’s July 2 announcement marks both an end and a new beginning: while two flagship internal projects have been cut, the tech giant is reallocating its creative firepower toward subscription growth, blockbuster sequels and innovative delivery platforms. Gamers and developers alike will be watching closely as Xbox reshapes its roadmap for the years ahead.
About The Author
