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Terminally Online
This is Terminally Online: PC Gamer’s very personal MMO column. Every different week, I’ll be sharing my ideas on the style, interviewing fellow MMO-heads like me, taking a deep-dive into mechanics we have all taken without any consideration, and, often, bringing in visitor writers to speak about their MMO of alternative.
I’m considerably vulnerable to pessimism on this column, although that is not with out trigger. MMOs aren’t precisely a dying breed, per se—we have got Guild Wars 3 to stay up for, and a lot of the outdated guard, whereas a little bit gray within the beard, have respectable playerbases and are thrumming with issues to do.
But it is arduous to not really feel my blood strain notch up a number of numbers at this week’s Xbox layoff information for… nicely, quite a few causes, actually. I’m irate particularly, nevertheless, on the present state of Zenimax Online Studios (ZOS), builders of The Elder Scrolls Online, who appear to have develop into Microsoft’s punching bag.
Left hook
I’m hard-pressed to think about a extra miserable set of info than Zenimax’s previous couple of years—again in July of 2025, Microsoft put 1000’s of individuals out of labor, together with these at ZOS and, extra to the purpose, the cancelled Project Blackbird.
Blackbird was Zenimax’s next major project, and while I can’t say for certain it would’ve revitalised the MMO market or anything, we sure as hell need more new MMOs. It was in development for over half a decade, something the then-founder Matt Firor had described as, admittedly, a bit of a “large bet.”
Still, the odds weren’t bad. The then-CEO of Microsoft Gaming Phil Spencer reportedly had to be torn away from it, and it was slated for a tentative 2028 release. And listen, even if you’ve got a cynical heart—five years of work from a development team of around 300 people getting flushed right down the toilet, along with 62 jobs (per a WARN notice), is a rattling disgrace.
It was one thing that shook Zenimax to its core—however the studio did handle to drag via. I truly spoke to a few of them again in January, talking with govt producer Susan Kath who stated that “the team has very much rallied … I see a lot of enthusiasm from the team as we’re going forward. Folks are excited about their work. I’m excited for them to be doing this. We’re looking forward.”
Game director Nick Giacomini additionally echoed: “We are excited by what we’re doing. We’re excited by this transformation, this change, this evolution. It’s like a second wind, and we’ve definitely got our eyes on the future, because this is our home. We are determined to make it continue to be so for us, for our players, for as long as we possibly can.”
Indeed, issues had been wanting up for ESO. It had discovered itself in a little bit of a rut, as most MMOs do sometimes—however a brand new dedication to a seasonal mannequin and an entire heap of reworks appeared devoted to addressing long-held quality-of-life complaints and shaking issues up.
The air, to me, felt like a smaller-scale model of the turnaround that World of Warcraft had after the disasters of Shadowlands, dedication to roadmaps and all.
Right hook
Fast-forward lower than half a 12 months later—an unconscionable period of time in shareholder land, I’ve to think about—and Zenimax Online Studios has been all however gutted. As PC Gamer’s personal Ted Litchfield figured out earlier in the week, an estimated 60% of the studio has been laid off between 2025 and 2026, with 213 of those layoffs happening this week.
That’s a reduction of 275 developers at the studio in a year and a half, and, look—I don’t want to cry that the sky is falling for ESO. Quite the opposite, I am hoping against hope that it’ll manage to find a second wind somewhere down the line—but you simply cannot lose the contributions of 275 people without a massive dip in quality.
It’s a response echoed by employees at the studio itself. Andrew Young, who left it in 2024, wrote: “There’s really no one left and no changing it now”. Other employees were sent reeling, stunned at the absence of teams they’d been working with for years and forced to pick up the pieces.
I want to point out that Xbox saw fit to lay these people off literally as its first season launched—with layoffs occurring on Monday July 6, and the season launching on July 8.
To imagine {that a} recreation that traditionally brings you in $166 million yearly someway is not worthwhile appears completely absurd to me.”
Just imagine it—you work on ESO, the layoffs from last year hit you hard, but you’re determined to turn things around. You’re using words like “rallied” in interviews, you’re finally getting to sort out complaints players have been having for years, you’re trying new things. And after a year of work, your first season of the new era of your game is coming out. Two days before it arrives, Microsoft lays off 213 of your team. That, or you’re shown the door yourself.
This is despite the fact that your game has brought in over $2 billion in revenue over its lifetime. That figure, posited in 2024, was touted 10 years after the game’s launch. That means that ESO was raking in an average of $166 million a year.
Now obviously, that figure’s going to have dips and peaks, that’s just the nature of doing business—but the sheer boneheaded, next-quarter blinders you have to have on to believe that a game that historically brings you in $166 million annually somehow isn’t profitable seems absolutely absurd to me.
And sure, maybe this reaction holds water if the fanbase wasn’t liking your new changes—except they did! Here’s just a few quotes from the Elder Scrolls Online subreddit:
- “What the fuck man. ESO was actually getting a second wind,” says u/PompeiiSketches.
- “The recreation gave the impression to be on the up and up, what occurred?” says u/Crimsonmaddog44.
- “Absolute insane conduct to make cuts to the group that has gotten tons of gamers (myself included!) again into participating with the sport” says u/Ion_bound.
In a post on the game’s forums, understandably stating that Zenimax’ll must be shifting its schedule round a bit, assist is current, too:
“I simply got here again due to your roadmap for the longer term, and realizing now the folks engaged on it are getting minimize by an organization that is billions within the inexperienced is absolutely heartbreaking,” writes one user, “know we haven’t at all times been proud of you all however these affected, whether or not they stay or not, didn’t deserve this. Especially in an period the place issues had been lastly wanting up once more. I’m horrified,” writes another.
This really does paint a picture of an MMO that was finally getting its sea legs back, just for Xbox to sweep in and knock it right off its feet again.
Holding shares
I will state it plainly: I think the way that Zenimax Online Studios has been treated is cruel, senseless, and short-sighted. There’s no capitalist argument to be made about shareholders or prices or changing industries that’s going to reach my ears on this one—it’s downright unconscionable.
This is a studio that was making a profitable MMO with big dreams for the future, one that had somehow, miraculously, recovered from having a massive project that’d been in development for half a decade shuttered overnight. One that was just about to release the first proper season of its new imagined identity for the game that earned Microsoft over $160 million a year for the past decade.
The last mainline The Elder Scrolls game, Skyrim, came out in 2011. That’s 15 years ago. While Skyrim’s obviously garnered a remarkably long-lasting legacy, in part because of its modding scene, the franchise has been held up on The Elder Scrolls Online since it launched in 2014. I’ve well over 2,000 hours in it. It’s had its ups and downs like any MMO, but it’s the only new Elder Scrolls anything we’ve had in nearly two decades.
Further hamstringing Zenimax is at odds with Xbox’s so-called renewed focus on its major franchises, unless it’s magically planning on releasing TES6 next week then it’ll still be on Zenimax to carry the torch. And it’s gotta be hard to do all that heavy lifting, let alone when you’re making an MMO of all things, with fewer people and fewer resources. Xbox, you don’t want to stagnate the only thing stopping your big ticket franchise from being a relic.
It has been sacrificed almost wholesale on the altar of growth, by a company that spent over $68 billion on Blizzard, with Microsoft itself spending over $80 billion in 2025 on AI pipedreams. Its developers have been laid off to support a fantasy of getting 1 billion daily players, somehow, in a portfolio that’s down 1,600 working roles and will be down 1,600 more by 2027.
More than that, this is an MMO we’re talking about. If ESO takes a nosedive from here on out (and god, I am hoping it doesn’t), that’ll be one less game in an already-dwindling genre that’s struggling to put up a fight amongst the unhealthy ambitions of the current industry’s gluttony. ZOS deserved better.
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