According to Kotaku, Matt Firor, the founder of Zenimax Online and the longtime leader behind The Elder Scrolls Online, confirmed he resigned from Microsoft in the summer of 2023. His departure came directly after the tech giant canceled Project Blackbird, an ambitious online multiplayer game he was developing, and laid off dozens at the studio. Firor called Blackbird “the game I had waited my entire career to create” in a January 1 LinkedIn post he later shared on Bluesky. Bloomberg reported the title was a loot shooter blending Destiny and Blade Runner with MMORPG quests, and that Xbox CEO Phil Spencer himself played and loved a build in March 2023. The cancellation was part of wider cuts where Xbox studios were reportedly tasked with hitting a controversial 30% profit margin.
The Human Cost of Corporate Math
Here’s the thing that gets me. Spencer reportedly loved the game. The team was veteran and talented, many with 20+ years working together. And it still got the axe. That tells you everything about the disconnect between creative passion and corporate spreadsheet decisions. Firor’s post is remarkably diplomatic—he doesn’t name Microsoft or throw direct blame—but the hurt is palpable. His heart is with the team, not the project’s IP. When the dream project you’ve built a career toward gets canned, what’s left? For him, the answer was to leave. For some of his colleagues, it was to found Sackbird Studios, explicitly seeking “full creative control” free from “corporate compromises.” That’s not a coincidence; it’s a direct indictment.
The Game Pass Profitability Puzzle
So why cancel a project the top brass liked? The reported mandate for a 30% profit margin across Xbox Game Studios is the giant, ugly clue. Think about the pressure that creates. You’re making a huge, expensive live-service loot shooter, the kind that requires a massive team and years of post-launch support. But all your revenue is also feeding the Game Pass machine, where games are “free” to subscribers. The math on making a profit that way, especially on a brand-new IP, is brutal. Basically, it seems like the corporate strategy shifted underneath the developers. The acquisition promised resources, but the new reality demanded margins that maybe only sure-thing franchises can guarantee. It turns “loved by leadership” into a nice sentiment, not a shield.
A Broader Pattern of Disruption
This isn’t just one studio’s sad story. It feels like a case study in the turbulent integration of a creative acquisition. Microsoft bought Zenimax for $7.5 billion, gaining legendary studios and IP. But now they have to make the numbers work, and that means hard choices that look like betrayal to the people who built the value in the first place. We’re seeing the human capital—the institutional knowledge and veteran leadership—walk out the door or get shown it. Firor is a huge loss. He didn’t just run a studio; he successfully steered a rocky MMO launch into a lasting success. Losing that expertise while chasing margin targets is a huge gamble. Is the short-term financial streamlining worth the long-term creative drain? Microsoft’s betting it is.
