In a scathing Twitter thread that’s now making the rounds across gaming communities, legendary game designer Sandy Petersen – the Doom designer behind classics like Age of Empires and Halo Wars – just revealed what he believes was the real reason Ensemble Studios was shut down in 2009. According to Petersen, former Xbox boss Don Mattrick deliberately killed the studio and its massive Halo MMO project called Titan to protect his personal stock bonus. And if Petersen’s claims are accurate, it’s a decision that might have cost Microsoft over a billion dollars.
The allegation is damning: Mattrick’s stock bonus was tied to Microsoft’s gaming revenue over a three-year period. Ensemble was building an MMO that would have taken 3.5 years to complete – extending beyond his bonus window. So rather than let the studio continue its expensive work, he allegedly shut it down entirely. No Titan. No Ensemble Studios. No billion-dollar revenue stream. All to protect his personal financial incentives.
What Was Project Titan
Project Titan was supposed to be a massive multiplayer online game set in the Halo universe. But unlike anything Bungie or 343 Industries had done before, Titan would take place tens of thousands of years in the past, before the Halo rings were activated and wiped out all sentient life in the galaxy. The scope was ambitious – players could choose to play as Forerunners or the Covenant, with the Flood included as a non-playable threat lurking in the shadows.
Petersen was in charge of the universe-building for Titan, which meant crafting the entire ancient lore of the Halo universe. He worked on planet histories, alien species backstories, homeworlds for all the playable races, and an incredibly detailed set of quest lines. By the time the project was canceled, the game was far along in development – far enough that screenshots and in-game models of the project have since leaked online, showing what could have been.
The Financial Case
Here’s where the financial picture gets staggering. Microsoft and Ensemble’s internal estimates projected that Project Titan would generate a minimum of $1.1 billion in revenue. To put that in perspective, the entire Halo franchise across all games, merchandise, and media had generated roughly $5 billion by 2021 – and that’s over twenty years. Titan was supposed to pull in more than a fifth of that franchise’s total revenue as a single game.
For context, this was a studio with an almost perfect track record. Ensemble Studios never released a game that sold fewer than three million copies. Age of Empires, Age of Empires II, Age of Empires III, Halo Wars – everything they touched turned to gold from a sales perspective. Shutting down a studio with that pedigree working on a billion-dollar project makes zero business sense from a shareholder perspective.
Petersen’s Accusation
According to Petersen, the math was simple for Don Mattrick. His stock bonus was calculated based on Microsoft’s gaming revenue over a specific three-year window. Ensemble estimated they would need 3.5 years to complete Titan if done right – which would have extended beyond Mattrick’s bonus period. By firing everyone at Ensemble and shutting down the studio entirely, Mattrick avoided paying for an expensive development team for those extra years while the game continued development.
“All he lost was a game studio who never sold less than 3 million copies of everything we made,” Petersen wrote in his Twitter thread. “I don’t believe he did justice to Microsoft stockholders but hey – Don started as an EA hatchet man so what would you expect?” The comparison to a corporate hatchet man is particularly brutal given Mattrick’s reputation at EA before joining Microsoft.
Petersen didn’t present specific financial documents proving this was Mattrick’s reasoning – his account is based on his understanding of the situation and Mattrick’s employment contract. But the timeline does line up perfectly. Mattrick joined Microsoft in February 2006 and became head of Xbox in July 2007. Ensemble’s closure came in 2009. The numbers and dates are consistent with Petersen’s allegation.
The Pattern of Questionable Decisions
This story gains extra weight when you consider the broader context of Don Mattrick’s tenure at Xbox. His leadership during the Xbox One era is remembered as one of the worst periods for the brand. The “always online” requirements, the forced Kinect bundling, the focus on game sharing restrictions – these decisions alienated the core gaming audience and helped PlayStation dominate that generation.
Then there was the infamous 2013 “no internet? buy 360” comment that became a viral meme mocking Mattrick’s disconnect from gaming consumers. His tenure was marked by decisions that seemed to prioritize corporate metrics over actual gamer interests and long-term brand health. If Petersen’s account is accurate, shutting down Ensemble Studios for a personal bonus fits perfectly into that pattern of short-sighted thinking.
Other Perspectives
It’s worth noting that not everyone in the community has accepted Petersen’s account uncritically. Some have pointed out discrepancies in his timeline, noting that Project Titan actually started development earlier than 2008 – possibly as early as 2004 or 2006 – and was shut down in mid-to-late 2007, not 2009. Others have suggested that Microsoft’s corporate strategy shift away from MMOs and toward casual gaming might have played a role alongside any executive bonus considerations.
Dusty Monk, another Ensemble developer, corroborated part of the story but offered a slightly different angle. He claimed Microsoft wanted to appeal to a more casual audience and wasn’t interested in funding an expensive, long-term MMO project. So while Petersen blames Mattrick’s personal greed, Monk suggests corporate strategy also played a role.
Don Mattrick’s Response
As of publication, Don Mattrick himself has not publicly responded to Petersen’s allegations. Whether he’ll address these claims remains to be seen. Mattrick left Microsoft in 2015 and joined Zynga (now Take-Two Interactive) before eventually stepping back from the gaming industry. The man at the center of this controversy has largely stayed out of the public eye in recent years.
What This Says About Corporate Gaming
Regardless of the exact details, Petersen’s story illustrates a fundamental problem in corporate game development: when executive compensation is tied to short-term metrics, it can incentivize decisions that harm long-term value creation. If a billion-dollar game doesn’t fit into your three-year bonus window, why would you care? You get your money either way, and your successor can deal with the consequences.
This issue becomes even more relevant in 2025 as Microsoft continues closing studios and canceling games. In August 2025 alone, Microsoft shut down multiple game studios and canceled projects like Contraband, reminding everyone that corporate incentive structures can be more powerful than actual game quality or sales potential. The pattern that Petersen is describing seems to have never really stopped.
FAQs
What was Project Titan exactly?
Project Titan was a Halo MMO in development at Ensemble Studios that would have been set tens of thousands of years before the events of the main Halo games. Players could choose to play as Forerunners or the Covenant, with detailed lore spanning ancient alien civilizations and quest lines across multiple homeworlds.
When was Project Titan cancelled?
Accounts vary slightly, but Project Titan appears to have been cancelled in mid-to-late 2007, though Ensemble Studios itself remained operating until early 2009. The studio was eventually shut down by Microsoft as a whole.
How much money did Microsoft estimate Project Titan would make?
Microsoft and Ensemble Studios jointly estimated that Project Titan would generate a minimum of $1.1 billion in revenue. This was a conservative estimate, making the cancellation even more financially questionable.
Did Sandy Petersen have evidence of Don Mattrick’s motivations?
Petersen’s account is based on his understanding of Mattrick’s stock bonus structure and employment contract terms, combined with the timeline of events. He has not publicly presented specific financial documents proving Mattrick’s exact reasoning, though the timeline and numbers he cites are consistent with public records.
Why is Ensemble Studios significant?
Ensemble Studios was the legendary developer behind the Age of Empires series and Halo Wars. Every game they released sold at least three million copies, making them one of Microsoft’s most consistently successful studios. Their closure seemed counterintuitive from a business perspective.
Did any other Ensemble developers comment on the closure?
Yes, Dusty Monk, another Ensemble developer, offered a slightly different perspective. While he didn’t dispute Mattrick’s role, Monk suggested that Microsoft’s strategic shift toward casual gaming and away from expensive MMO projects also contributed to the decision.
Is this the first time Petersen has made these allegations?
No, Petersen previously discussed this on the Bored With Nelly YouTube show. However, his recent Twitter thread in November 2025 has brought renewed attention to the story and sparked fresh discussions about corporate decision-making in the gaming industry.
Conclusion
Whether or not every detail of Sandy Petersen’s account is precisely accurate, the broader story is damning. A legendary studio with a perfect track record was shut down while working on a game that Microsoft itself estimated would generate $1.1 billion in revenue. The project was far enough along that conceptual art, models, and screenshots still exist. And the person who made this decision allegedly benefited personally from it through stock bonuses tied to short-term metrics. The details might be debated, but the fundamental tragedy is real: a game that could have been a Halo franchise cornerstone never saw the light of day, and a beloved studio was dissolved. In 2025, as Microsoft continues its string of game cancellations and studio closures, Petersen’s allegations remind us that sometimes the worst enemy of great games isn’t limited resources or technical challenges – it’s corporate incentive structures that reward executives for short-term thinking and personal gain over long-term value creation.