Microsoft cancels Blizzard's survival game amid layoffs, shifts developers to "one of several promising new projects" [UPDATED]

Blizzard's cancelled survival game
(Image credit: Activision Blizzard)

What you need to know

  • Reportedly, Microsoft has made the decision to cancel Blizzard's survival game that was announced in 2022. It would have been the studio's first new IP since 2016's Overwatch.
  • Microsoft's president of Game Content and Studios Matt Booty announced the news in an internal letter to staff, saying that the company is "shifting some of the people working on" the survival game to future Blizzard projects.
  • The cancellation comes amid 1,900 job cuts Microsoft is making across its gaming division, with people at Activision Blizzard, ZeniMax Media, and Xbox Game Studios affected.
  • At the same time, Blizzard president Mike Ybarra and co-founder Allen Adham are leaving the company. Microsoft is expected to name a new president next week.
  • These layoffs are the latest in what has been an unbelievably devastating year for the gaming industry. In 2023, roughly 10,000 developers were cut from developers and publishers, and these new Microsoft cuts increase 2024's total to nearly 5,900. We're still in January.
  • Update: One of the visual effects artists that worked on Blizzard's survival game has said that "the entire Survival Team just got laid off," which seemingly contradicts Microsoft's stated plan to transfer some of its developers to other projects.
  • Update: A new report has revealed that technical issues with the game's engine led to development struggles, and were ultimately why the decision was made to cancel it.

Update 1/25/2024 at 1:00 p.m. PT / 4:00 p.m. ET: According to a new Bloomberg report, Blizzard's survival game was largely cancelled due to issues with its engine, Synapse. Though the game was prototyped on Epic Games' Unreal Engine, Blizzard switched to an in-house engine originally intended for mobile games, partially because it would enable them to create maps that supported up to 100 players. However, progress with this engine was slow, and though developers hoped Microsoft's acquisition would allow the company to move back to the Unreal Engine, the project was ultimately cancelled.

“As difficult as making these decisions are, experimentation and risk taking are part of Blizzard’s history and the creative process,” said Blizzard spokesman Andrew Reynolds. “Ideas make their way into other games or in some cases become games of their own. Starting something completely new is among the hardest things to do in gaming, and we’re immensely grateful to all of the talented people who supported the project.”

Update 1/25/2024 at 10:10 a.m. PT / 1:10 p.m. ET: In the wake of the layoff announcements, a visual effects artist that worked on Blizzard's survival game said that "the entire Survival Team just got laid off" in a post on X (Twitter). Notably, this contradicts Matt Booty's statement that some of the game's developers would be transferred to "one of several promising new projects Blizzard has in the early stages of development." At this time, it's unclear if Microsoft's plan has changed, or if this contradiction is the result of a miscommunication or misunderstanding.

Back in 2022, Blizzard Entertainment revealed it was developing a survival game set in an entirely new universe, making it the first original property from the developer since Overwatch's release in 2016. This morning, though, it's reportedly been cancelled by Microsoft amid 1,900 layoffs at its gaming division.

According to a letter to employees seen by The Verge, Xbox's president of Game Content and Studios Matt Booty announced the news. In the note, he mentioned that Microsoft — which completed its $69 billion acquisition of Activision Blizzard in October — is "shifting some of the people working on it" to future Blizzard projects.

"Today’s actions affect multiple teams within Blizzard, including development teams, shared service organizations and corporate functions,” Booty said. “As part of this focus, Blizzard is ending development on its survival game project and will be shifting some of the people working on it to one of several promising new projects Blizzard has in the early stages of development.”

Very little was officially known about Blizzard's nameless survival game (rumored to be called "Odyssey"), as all we saw of it was a few pieces of concept art. Even so, it was Blizzard's first publicly revealed new property since Overwatch.

Once more, Blizzard leadership is changing

The Blizzard Entertainment logo. (Image credit: Windows Central)

At the same time we learned that Blizzard's survival game has been shuttered, Blizzard Entertainment president Mike Ybarra confirmed he's stepping down and departing the company. Its chief design officer and co-founder, Allen Adham, is leaving as well. Reportedly, Microsoft is expected to announce a new Blizzard president next week.

The news comes after former Activision Blizzard CEO Bobby Kotick and other leadership staff left in late December. Executives remaining in Activision Blizzard now report to their Microsoft counterparts as the newly acquired publisher moves forward.

Analysis: Brutal gaming layoffs continue to mount

Neon in Valorant. (Image credit: Riot Games, Inc.)

These new Microsoft layoffs are the latest in what can only be described as a devastating year for the gaming industry. Roughly 10,000 jobs were cut from various developers, publishers, and companies in 2023, and we're already up to nearly 5,900 in 2024 — and January hasn't even ended yet.

I'm glad that Microsoft is transferring at least some of the workers that contributed to this survival game to other projects. However, I can't help but wonder how many people who poured their blood, sweat, and tears into this game are now finding out that they've been let go.

1,900 is a brutal, devastating number. While some post-merger reorganization was expected to address things like role overlap and such, to say this many layoffs are shocking would be an understatement. Frankly, it's disgusting that Microsoft — which reported nearly $57 billion in revenue for FY24 Q1 alone and is now challenging Apple for the right to call itself the most valuable company in the world — has cut this many people from Blizzard and other studios under its wing.

Just a few days before these Microsoft job cuts, Riot Games laid off hundreds of its staff, resulting in 530 developers (11% of its global workforce) being affected. The League of Legends and Valorant maker said the layoffs were the result of expanding into a number of different projects too quickly.

Brendan Lowry

Brendan Lowry is a Windows Central writer and Oakland University graduate with a burning passion for video games, of which he's been an avid fan since childhood. You'll find him doing reviews, editorials, and general coverage on everything Xbox and PC. Follow him on Twitter.

  • jonzie23
    Well, that sucks. I was actually curious about this game...
    But I did say before that it looks a lot like Everwild, so I guess that one too precedence, as they sounded familiar. Same as Warzone and Halo Battle Royale.
  • fjtorres5591
    Was Odyssey supposed to be a live service game?
    Edit: If the game was a long ways off, MS already has GROUNDED in that space.