Rising From Microsoft’s Ashes
A group of veteran developers behind The Elder Scrolls Online and the cancelled Project Blackbird announced October 7-8, 2025 the formation of Sackbird Studios, an independent employee-owned game studio that is self-funded for multiple years. The Baltimore-based studio currently consists of fewer than 10 senior developers who worked on ZeniMax Online Studios’ projects before Microsoft’s mass layoffs earlier this year shuttered Project Blackbird despite executives including Phil Spencer being “blown away” by the game during a March 2025 demonstration.
The studio’s cheeky name references Project Blackbird, the sci-fi MMO shooter described as blending Cyberpunk 2077 with Destiny that had been in development since 2018. With no outside investors and full creative control, Sackbird represents a direct rejection of the corporate structures that led to Blackbird’s cancellation. “We’re fully employee-owned and funded, which means we only answer to people who are passionate about games,” stated COO David Worley. The team is already developing an original project for PC and consoles but won’t share details “until the game is ready.”
The Project Blackbird Tragedy
Understanding Sackbird’s formation requires context about Project Blackbird’s shocking cancellation. Bloomberg’s Jason Schreier reported in July 2025 that the MMO shooter had been in development since 2018 at ZeniMax Online Studios. In March 2025, just months before cancellation, the team delivered a demonstration to Xbox executives including Phil Spencer and Matt Booty that received rave reviews. Spencer reportedly enjoyed playing the game so much that Booty had to pull the controller away to keep the meeting progressing on schedule.
Despite technological hiccups and a lengthy development cycle, the game appeared to be making good progress according to people in the room. Yet in July 2025, during Microsoft’s mass layoff wave that also cancelled Perfect Dark, Everwild, and Contraband, Blackbird was indefinitely shelved. Employees discovered their Slack accounts had been disabled and were called into an 11am meeting where they learned the project was cancelled. They spent hours in limbo without official communication from management or HR before receiving confirmation the next day that they’d been laid off.
| Detail | Information |
|---|---|
| Studio Name | Sackbird Studios |
| Location | Baltimore, Maryland |
| Founded | September 2025 |
| Team Size | Under 10 people (senior developers) |
| Ownership | 100% employee-owned |
| Funding | Self-funded for multiple years |
| Outside Investors | Zero |
| Current Project | Original IP for PC and consoles (details TBA) |
Why Blackbird’s Cancellation Was Particularly Shocking
Project Blackbird’s cancellation stood out as especially egregious because it contradicted everything Microsoft claimed about supporting studios and evaluating projects on merit. Phil Spencer, Microsoft Gaming CEO, had personally played the demo and been enthusiastic. Matt Booty, head of Xbox Game Studios, was present and engaged. The team had worked for seven years building this project. Yet despite executive approval and apparent quality, it got caught up in Microsoft’s cost-cutting bloodbath.
The Bloomberg report noted that employees were never given an explanation for the cancellation. Industry observers speculate that Blackbird was deemed too expensive and risky despite its quality – a decision that encapsulates corporate gaming’s current priority of safe investments over creative ambition. The fact that Spencer enjoying the game couldn’t save it demonstrates that even top-level executive support means nothing when finance departments dictate which projects survive.
The Employee-Owned Model
Sackbird’s employee ownership structure represents a growing trend among developers fleeing AAA corporate environments. CEO Lee Ridout explained the philosophy: “When I learned that Blackbird was being cancelled and a lot of people were losing their jobs, it lit a fire. We realized the best way to protect our craft—and our team—was to create a studio where creative independence isn’t negotiable.”
Employee ownership means no shareholders demanding quarterly profits, no publishers forcing monetization schemes into games, and no corporate restructuring endangering projects based on balance sheets rather than quality. The founding team retains full creative control because they answer only to themselves. This structure prioritizes long-term sustainability and creative vision over short-term financial extraction.
The multi-year self-funding runway is particularly significant. Most indie studios survive project-to-project, constantly chasing publisher deals or investor funding that comes with creative strings attached. Sackbird’s founders apparently have enough capital saved or secured to operate for several years without external money, giving them time to develop their game properly without pressure to ship prematurely or compromise vision for marketability.
The Founding Team’s Credentials
Sackbird’s founding members bring extensive MMO and live-service expertise from The Elder Scrolls Online and Project Blackbird. ESO launched in 2014 and remains one of the most successful subscription MMOs despite initial mixed reception, demonstrating the team’s ability to iterate and improve live games over years of operation. The studio director Matt Firor built ESO into a profitable long-term success before leaving ZeniMax Online Studios following Blackbird’s cancellation.
Project Blackbird represented the team’s attempt to apply lessons learned from ESO to a sci-fi setting with shooter mechanics inspired by Destiny. The cancelled project would have been their first attempt at a shooter-focused live-service game rather than traditional MMO design. While Blackbird never shipped, the development experience means Sackbird’s founders understand live-service infrastructure, multiplayer netcode, content pipelines, and monetization systems that support ongoing game operation.
Taking Smart Risks Without Corporate Gatekeepers
COO David Worley’s statement captures Sackbird’s core philosophy: “After years in AAA, we wanted the freedom to take smart risks without waiting for a greenlight or chasing quarterly targets.” This directly addresses frustrations with corporate development where promising projects die in committee, innovative ideas get focus-grouped into mediocrity, and creative risks are discouraged in favor of safe sequel formulas.
The “smart risks” framing is important – Sackbird isn’t advocating reckless experimentation but rather calculated creative decisions that corporate structures wouldn’t greenlight despite having legitimate potential. Examples might include niche genres AAA publishers view as unmarketable, gameplay mechanics that don’t test well in focus groups but create depth, or monetization models that prioritize player goodwill over maximum extraction.
Avoiding Industry Pitfalls They’ve Experienced
Sackbird’s announcement specifically mentions the studio is “designed to avoid many of the pitfalls they’ve experienced across the industry.” While the founders don’t elaborate on specific pitfalls, the context suggests several issues endemic to AAA development:
– **Scope creep without resource increases:** Projects expand without proportional budget/time, forcing crunch or cuts
– **Executive meddling:** Leadership overriding developer expertise based on market trends or personal preferences
– **Unstable funding:** Projects cancelled mid-development despite progress due to corporate restructuring
– **Creative compromise:** Mechanics watered down or removed to appeal to broader demographics
– **Unsustainable crunch:** Mandatory overtime destroying work-life balance during extended development
By maintaining a small senior team with multi-year funding and no external pressure, Sackbird can avoid several pitfalls simultaneously. Small teams reduce communication overhead and prevent scope creep. Self-funding eliminates external pressure for specific features or timelines. Employee ownership ensures nobody can overrule collective creative decisions for profit motives.
The Mysterious First Project
Sackbird has revealed virtually nothing about their debut game beyond confirming it’s an original IP for PC and consoles. The announcement states they’ll share information “when the game is ready,” rejecting the industry trend of announcing games years before release to generate hype and secure publisher funding.
Given the team’s background in MMOs and live-service games, speculation centers on whether Sackbird will continue pursuing multiplayer experiences or pivot to single-player design. The “fewer than 10 people” team size suggests something more focused than traditional MMOs requiring massive content pipelines. Possible directions include smaller-scale co-op games, innovative live-service experiments with modest scope, or even single-player experiences leveraging their narrative and world-building expertise.
The PC and console target platforms notably exclude mobile, suggesting Sackbird isn’t chasing free-to-play mobile markets despite that space’s profitability. This aligns with their stated focus on creative independence over maximum monetization – mobile game design often requires aggressive monetization that conflicts with player-friendly approaches.
Community Response – Respect and Support
The r/Games Reddit discussion shows overwhelming support for Sackbird’s formation and approach. Top comments celebrate the punny name (Blackbird → Sackbird), express hope that developers can succeed outside corporate structures, and share frustration with Microsoft’s pattern of cancelling promising projects. The employee-owned, self-funded model generates particular enthusiasm as an alternative to venture capital funding that often destroys studio culture.
Some skepticism exists about whether small teams can compete in an industry where marketing budgets often exceed development costs. Without publisher backing, Sackbird faces challenges reaching audiences overwhelmed by options. However, supporters note that passionate communities can organically promote games they believe in, and quality products find audiences through word-of-mouth if given time to build momentum.
Part of a Broader Indie Exodus
Sackbird joins a growing number of studios formed by AAA refugees seeking creative independence. Recent examples include:
– Former BioWare developers founding Archetype Entertainment and Brass Lion Entertainment
– Ex-Bungie staff creating Lightforge Games
– Previous Riot employees establishing Theorycraft Games
– Departed Blizzard veterans launching Frost Giant Studios and Dreamhaven
These studios share common themes: small teams, creative control prioritization, rejection of corporate profit-maximization, and focus on sustainable development over crunch culture.
The trend reflects broader industry dissatisfaction with AAA consolidation and corporate decision-making disconnected from development realities. As major publishers like Microsoft, Sony, EA, and Activision absorb studios then impose standardized processes and financial targets, talented developers increasingly choose independence despite financial uncertainty over corporate stability that comes with creative compromise and job insecurity.
The Long Road Ahead
While Sackbird’s formation generates optimism, the road ahead remains challenging. Self-funding only lasts as long as capital holds out – if development takes longer than anticipated or the first game underperforms commercially, the studio faces existential crisis without publisher backing or investor cushion. Employee ownership means founders risk their own savings rather than gambling with someone else’s money.
Additionally, launching an original IP without existing franchise recognition or publisher marketing machinery requires grassroots community building and organic discovery. Sackbird’s website currently shows minimal presence, suggesting they’re prioritizing development over marketing until closer to release. This approach respects their “we’ll share when ready” philosophy but means building audience from zero once they do announce.
Success requires not just creating a great game but doing so within budget and timeline constraints while finding an audience in an oversaturated market. Many talented developers have founded studios with similar ideals only to close after one underperforming title. Sackbird’s multi-year runway provides buffer that most don’t have, but it’s not unlimited.
FAQs
What is Sackbird Studios?
Sackbird Studios is an employee-owned, self-funded game development studio founded in September 2025 by veteran developers from The Elder Scrolls Online and the cancelled Project Blackbird. The Baltimore-based studio has fewer than 10 senior developers and is developing an original game for PC and consoles.
Why is it called Sackbird?
The name references Project Blackbird, the cancelled Xbox MMO the founding team was developing at ZeniMax Online Studios before Microsoft’s layoffs. “Sackbird” is a playful pun on being sacked (laid off) from Blackbird.
What happened to Project Blackbird?
Project Blackbird was a sci-fi MMO shooter blending Cyberpunk 2077 with Destiny that impressed Xbox executives including Phil Spencer during a March 2025 demo. Despite this, Microsoft cancelled it in July 2025 during mass layoffs, laying off the development team without explanation.
Does Sackbird have outside investors?
No. Sackbird is completely self-funded with no outside investors, giving the employee-owned team full creative control. They have funding for multiple years of development before needing external support.
What is Sackbird’s first game?
Sackbird is developing an original IP for PC and consoles but hasn’t revealed any details. The team states they’ll share information “when the game is ready” rather than announcing years before release.
How big is Sackbird Studios?
Currently fewer than 10 people, all senior developers with experience from The Elder Scrolls Online and Project Blackbird. The studio describes itself as a “tight, senior team” focused on quality over size.
Will Sackbird make MMOs like their previous work?
Unknown. While the founding team has extensive MMO experience, their small size suggests they may pursue more focused multiplayer experiences or potentially single-player games rather than traditional large-scale MMOs.
When will Sackbird’s first game release?
No timeline has been announced. The studio is self-funded for multiple years, suggesting they’re prioritizing quality and sustainable development over rushing to market.
Conclusion
Sackbird Studios represents both a heartening success story and damning indictment of corporate gaming’s current state – veteran developers with proven track records creating critically-acclaimed games felt their only path forward was abandoning AAA entirely to form an employee-owned studio answering to nobody but themselves. The fact that Phil Spencer personally enjoying Project Blackbird couldn’t save it from Microsoft’s cost-cutting demonstrates that quality, executive support, and years of development mean nothing when finance departments prioritize safe investments over creative ambition. Sackbird’s founding team chose sustainable independence over corporate instability, self-funding over investor pressure, and creative control over quarterly profits – principles that shouldn’t sound revolutionary but do in an industry where major publishers routinely cancel promising projects and lay off entire teams despite record profits. Whether their first game succeeds commercially remains uncertain, but Sackbird has already succeeded in the most important way: they’ve reclaimed agency over their creative work and built a structure designed to sustain rather than exploit the people making games. For developers watching major studios churn through talent while cancelling projects that executives themselves enjoyed, Sackbird offers an inspiring alternative model that prioritizes craft over corporate compromise.