After Layoffs and a Cancelled Game at Microsoft, Ex–Elder Scrolls Online Devs Launch Sackbird Studios

Sometimes, the end of one project sparks the beginning of something better. That seems to be the case for a group of veteran developers who once worked on The Elder Scrolls Online and an ambitious, now-cancelled project at Microsoft’s ZeniMax Online Studios.

This week, the team announced the formation of Sackbird Studios, a new, employee-owned studio based in Baltimore, Maryland. For the group, the move isn’t just about making another game it’s about taking control of their own future after a rough year of layoffs and setbacks.

A Studio Born From a Canceled Dream

Earlier this year, Microsoft reportedly shut down a large-scale online project codenamed Project Blackbird. The game had been in development for several years under ZeniMax Online, the same studio behind The Elder Scrolls Online. When it was cancelled, dozens of developers lost their jobs, despite positive internal feedback on the project.

Rather than scatter to other companies, several senior members of the team decided to build something new a studio where creative freedom wouldn’t depend on corporate approval or shifting budgets. Thus, Sackbird Studios took flight.

In their announcement, the founders described the company as fully employee-owned and self-funded, a deliberate move to avoid outside investors dictating design choices. “We only answer to people who are passionate about games,” said COO David Worley. CEO Lee Ridout added that the collapse of Blackbird was the final push: “When the game was cancelled and so many of our friends were let go, we realized the only way to protect our craft was to create a place of our own.”

Building Something Smaller, Smarter

The team says Sackbird will stay small fewer than a dozen people for now but that’s by design. Their first project, still unannounced, is in early development for PC and consoles. They describe it as a “deeply personal” game, though no genre or release window has been shared yet.

By remaining independent, the team hopes to move faster and take risks that would have been impossible inside a large publisher’s structure. It’s a familiar story in the industry: talented developers leaving the AAA world to build something with fewer restrictions and more creative soul.

Sackbird’s launch follows a difficult period for developers across Microsoft’s studios. Layoffs hit multiple teams earlier this year, including ZeniMax and Arkane Austin, with several projects canceled mid-development. While those cuts have shaken morale industry-wide, Sackbird’s formation shows that some veterans are choosing to rebuild on their own terms.

The studio’s tone so far feels optimistic rather than bitter. Its first public statement reads more like a mission than a press release: “We’re building a studio where everyone has a voice and where games are made by people who love making them.”

For now, Sackbird Studios stands as a symbol of resilience. Out of a cancelled game and a round of layoffs, something new and potentially very special is taking shape.