As more and more details continue to pour out of the recent news that Microsoft is cutting jobs and canceling games under Xbox, a new report sheds a bizarre light on one particular cancellation.
Bloomberg's Jason Schreier reported on Thursday that during a meeting back in March, gaming leadership at Microsoft was checking out a demonstration for Blackbird, an unannounced MMORPG from ZeniMax Online Studios.
According to people in the room, Microsoft Gaming CEO Phil Spencer was enjoying playing the game so much that studio head Matt Booty had to pull the controller away from him so the meeting could continue. Leadership reportedly had nothing but positive things to say about the game.
Blackbird had been in development since 2018, with a growing team under ZeniMax Online Studios — which also developed and oversees The Elder Scrolls Online — developing a new game engine in order to support the project. In March, the project had 300 developers working on it, with a planned release window of 2028.
This team included some former staff from Arkane Austin, a studio shut down by Microsoft in May 2024. At the time, part of the reasoning given by Booty for the shutdown was to focus resources on "high-impact titles" that would remain in development.
Bloomberg describes Blackbird as a third-person, science-fiction "looter-shooter," with an aesthetic comparable to films like Blade Runner. Players would've been able to double-jump and use grappling hooks to navigate the world's tall buildings.
Following this cancellation, which reportedly came as a surprise to staff, ZeniMax Online Studios has been hit with potential layoffs, but the numbers are unclear.
The team is unionized, but does not yet have a contract, meaning many of the staff are reportedly in a state of limbo at the union negotiations for jobs and severance.
Anonymous sources speaking with Windows Central firmly blame the company's unrealistic financial expectations for the recent cuts, which come at a time when Microsoft is increasingly focused on spending for AI.
No reason given, at all
It's borderline impossible to account for the apparent discrepancies here from Microsoft Gaming leadership. If there were concerns to raise such as how long the game had taken to develop, the number of workers it required, or even how far away is still was, why wouldn't they have done so during this meeting?
In addition to Blackbird, Microsoft Gaming also canceled Everwild, a new IP from Rare that's been in development for a long time. The company also shuttered The Initiative, canceling the Perfect Dark reboot the team was co-developing alongside an external team at Crystal Dynamics.
