After the ‘Bloodbath’ at Microsoft, Starfield Is No Longer Todd Howard’s Favorite Child

ZeniMax Media, the parent company of Bethesda Game Studios, is undergoing a radical transformation following what industry insiders are calling a ‘bloodbath’ of layoffs and restructuring at Microsoft’s gaming division. The company is now narrowing its development focus to concentrate exclusively on its most iconic and commercially proven franchises: Fallout, Doom, and The Elder Scrolls. This strategic pivot marks a significant shift in priorities and raises serious questions about the future of Starfield, the ambitious space exploration RPG that was once heralded as Bethesda’s next big thing.

The Fall of Starfield from Grace

When Starfield launched in September 2023, it carried enormous expectations as Bethesda’s first new intellectual property in over 25 years. Todd Howard, the legendary game director behind The Elder Scrolls and Fallout series, had championed the project for years, describing it as his dream game and the culmination of decades of creative vision. The game received decent reviews and attracted millions of players through Xbox Game Pass, but it failed to achieve the cultural phenomenon status that Bethesda’s previous titles had enjoyed. Critics and players alike noted that while the game was ambitious in scope, it felt somewhat hollow compared to the rich, interconnected worlds of Skyrim or Fallout 4.

The underwhelming reception of Starfield appears to have accelerated Microsoft’s decision to refocus ZeniMax’s resources on proven franchises. Industry analysts suggest that in an era of tightening budgets and increased scrutiny on gaming investments, Microsoft is no longer willing to take risks on experimental projects when it has guaranteed money-makers sitting in its portfolio. The acquisition of ZeniMax by Microsoft in 2021 for $7.5 billion was primarily driven by the value of established franchises, and the parent company now seems determined to maximize that investment.

Microsoft’s Gaming Division Restructuring

The changes at ZeniMax are part of a broader wave of layoffs and restructuring that has swept through Microsoft’s gaming division over the past year. Following the historic $69 billion acquisition of Activision Blizzard in October 2023, Microsoft has been aggressively consolidating its gaming operations, resulting in thousands of job losses across multiple studios. Bethesda Game Studios, id Software, and other ZeniMax subsidiaries have not been immune to these cuts. Reports indicate that teams working on newer or less established projects have been particularly hard hit, while resources are being redirected toward franchises with proven track records and dedicated fan bases.

The decision to prioritize Fallout, Doom, and The Elder Scrolls makes clear business sense from Microsoft’s perspective. The Fallout franchise experienced a massive resurgence in 2024 following the success of Amazon’s television adaptation, which brought millions of new players to the games. The Elder Scrolls series, particularly Skyrim, continues to generate revenue more than a decade after its original release and remains one of the most beloved RPG franchises in gaming history. Doom, meanwhile, has established itself as the gold standard for first-person shooters, with recent entries receiving critical acclaim and strong sales.

What This Means for the Future

For fans of Starfield, the writing appears to be on the wall. While Bethesda has released downloadable content for the game, including the Shattered Space expansion, the reduced emphasis on the franchise suggests that the massive ongoing support that games like Skyrim and Fallout 4 received may not be forthcoming. This represents a significant shift in Todd Howard’s creative direction, as he must now refocus his attention on the franchises that built Bethesda’s reputation rather than the new universe he spent years creating.

The gaming industry as a whole is watching these developments closely. Microsoft’s approach to ZeniMax could signal broader trends in how major publishers manage their studios and intellectual properties in an increasingly competitive market. With development costs rising and player expectations higher than ever, the era of experimental big-budget games from major publishers may be coming to an end, replaced by a more conservative approach that prioritizes established brands over creative risk-taking. The highly anticipated Elder Scrolls VI, which has been in development for years, now carries even greater weight as Bethesda’s flagship project for the foreseeable future.