Huge Layoffs at Zenimax, a lot of ESO devs impacted

Jeremy · July 9

LPapirius wrote: »

Jeremy wrote: »

LPapirius wrote: »

Jeremy wrote: »

code65536 wrote: »

Jeremy wrote: »

With the advent of AI, basically every person's home can be transformed into a gaming studio.

That much Kool-Aid isn't good for your health. LLMs are a dead end. An impressive parlor trick that can easily fool those who don't pay attention to detail.

I don't drink Kool-Aid and what I said is fact. I know from personal experience. There is no parlor trick about it. You can design a game from home now with the assistance of A.I.

With no devs there is nobody to train the AI. It takes actual real life humans to train and fact check the AI's work.

AI is a wisp of smoke in a cloud. It can't do anything without human minders.

Sooner or later people are going to catch a clue about this. I hope it's sooner than later.

Real life humans are using the AI tools. That hasn't changed. What has changed is the tools allow individuals to accomplish a lot more work than they used to, so you don't need as many people now to develop the graphics and general content. It's not really replacing humans per say, but just making individuals more productive.

AI is a God sent for any video game developer who didn't have corporate backing or couldn't afford to hire a lot of help.

You have bought into a myth to the extent that you're embarrassing yourself. Essentially every task in industry that can be automated is already automated. AI can't do anything without someone to train it. Many businesses that laid off employees are now scrambling to get their brains back and quickly realized they were losing money with AI. AI is a bubble that's about to burst and take half the world economy with it.

I'm not talking about automation. So you are the one "embarrassing yourself".

I am referring to development tools. They have become vastly improved with the help of AI. Humans use them (not robots).

Sluggy · July 9

Jeremy wrote: »

Sluggy wrote: »

Jeremy wrote: »

Sluggy wrote: »

CAB_Life wrote: »

A couple of things. 1st the 80/20 rule exists in business (and nature, was noticed in pea growth originally, if I recall) because it’s been proven—anecdotally and factually—true time and again. On average 80% of the work is done by 20% of the employees.

Mostly utter nonesense. First of all, if you've got an operational business where 80% of the work is done by 20% of the people then you are failing as a business. And you could follow this line of logic to conclude that you only need a single employee to produce millions of dollars of output for any business anywhere.

More realistically, you can argue that 80% of the value brought in is by 20% of the workers. THAT is what is argued. But again it only reduces so far. The reason a programmer might bring in more money than a janitor is kinda obvious. They are the one making the product that the company sells. But just because the other person isn't directly earning the company as much doesn't make them useless. They are the infrastructure and support. If the programmer suddenly has to stop to pick up garbage and unclog toilets all day long then their output is going to plummet and along with it, the supposed value they bring.

With the advent of AI, basically every person's home can be transformed into a gaming studio. Why is a company - especially one mostly interested in making as much money as possible - going to pay for infrastructure costs when they can instead hire creators at home who are willing to pour their heart and soul into their projects at a fraction of the costs?

I think you are starting to see the beginning of how the gaming industry is going to reshape in the wake of A.I.

What does that have to do with anything I said?

You were talking about infrastructure costs in your post, and how those people brought value to the company. Like janitors etc.

My point was if the company can delegate development to independent creators using AI at home, then those infrastructure costs become moot because they no longer need the studios they pay the janitors to maintain. That's why they were laid off and the studios were closed.

It wasn't because they didn't bring value or they didn't do their fair share of work (which if I remember correctly was the original premise). It's because they are pursuing a leaner strategy with less corporate infrastructure and more reliance on outside talent.

But they aren't doing any of that. They aren't hiring freelance agents outside of the company. No one is. Those are the very first to get let go because they are the most expensive workers with the least at stake when it comes to company success. And as for remote work saving costs in general... most companies are still harping on about RTO.

Just to clarify, I agree that remote work WOULD allow them to cut brick and mortar costs and its why I've been such a thorn for anyone suggesting RTO but that's not not what companies are doing. Certainly not Microsoft. They've been especially belligerent about it to their own employees. Zos, as far as I know, was still doing remote work but that probably more has to do with Microsoft's hands-off approach to it thus far.

Jeremy · July 9

Sluggy wrote: »

Jeremy wrote: »

Sluggy wrote: »

Jeremy wrote: »

Sluggy wrote: »

CAB_Life wrote: »

A couple of things. 1st the 80/20 rule exists in business (and nature, was noticed in pea growth originally, if I recall) because it’s been proven—anecdotally and factually—true time and again. On average 80% of the work is done by 20% of the employees.

Mostly utter nonesense. First of all, if you've got an operational business where 80% of the work is done by 20% of the people then you are failing as a business. And you could follow this line of logic to conclude that you only need a single employee to produce millions of dollars of output for any business anywhere.

More realistically, you can argue that 80% of the value brought in is by 20% of the workers. THAT is what is argued. But again it only reduces so far. The reason a programmer might bring in more money than a janitor is kinda obvious. They are the one making the product that the company sells. But just because the other person isn't directly earning the company as much doesn't make them useless. They are the infrastructure and support. If the programmer suddenly has to stop to pick up garbage and unclog toilets all day long then their output is going to plummet and along with it, the supposed value they bring.

With the advent of AI, basically every person's home can be transformed into a gaming studio. Why is a company - especially one mostly interested in making as much money as possible - going to pay for infrastructure costs when they can instead hire creators at home who are willing to pour their heart and soul into their projects at a fraction of the costs?

I think you are starting to see the beginning of how the gaming industry is going to reshape in the wake of A.I.

What does that have to do with anything I said?

You were talking about infrastructure costs in your post, and how those people brought value to the company. Like janitors etc.

My point was if the company can delegate development to independent creators using AI at home, then those infrastructure costs become moot because they no longer need the studios they pay the janitors to maintain. That's why they were laid off and the studios were closed.

It wasn't because they didn't bring value or they didn't do their fair share of work (which if I remember correctly was the original premise). It's because they are pursuing a leaner strategy with less corporate infrastructure and more reliance on outside talent.

But they aren't doing any of that. They aren't hiring freelance agents outside of the company. No one is. Those are the very first to get let go because they are the most expensive workers with the least at stake when it comes to company success. And as for remote work saving costs in general... most companies are still harping on about RTO.

Just to clarify, I agree that remote work WOULD allow them to cut brick and mortar costs and its why I've been such a thorn for anyone suggesting RTO but that's not not what companies are doing. Certainly not Microsoft. They've been especially belligerent about it to their own employees. Zos, as far as I know, was still doing remote work but that probably more has to do with Microsoft's hands-off approach to it thus far.

Microsoft has been outsourcing labor since they acquired ZeniMax and have invested heavily in AI. Looking back, everyone should have saw this coming.

Estin · July 9

Marto wrote: »

Eldovar wrote: »

Apparently 213 workers were laid off according to the official WAN notice. That's a HUGE list.

More info: https://www.reddit.com/r/elderscrollsonline/comments/1ur8ejn/warn_notice_states_that_213_workers_were_laid_off/

This is absolute insanity.

They're reducing the size of the studio by more than 2/3. They want this game to be worked on by less than 100, maybe even less than 50 people. How is that feasible?? How is that a way to treat one of the highest earning games under the Bethesda umbrella???

These layoffs cannot be allowed to go through. At what point does studio leadership stand up and do something? If not now, when? When they cut the studio in half for a third time?

Are you seriously going to just sit there and let your parent company destroy nearly 20 years of your work?

I was reading the comments in that post, and apparently according to linkedin, ZOS had anywhere from 437 to 494 employees as of June 2026. That means after the layoffs, ZOS has anywhere from 224 to 281 employees left. If that is true, then the situation isn't ask bleak as it seems. And if I understand the WARN act correctly, then that means they have 60 days before they're effectively laid off, and with some possibility of being rehired. The only question is, who are those employees and what did they do? Were that many in office or were they contractors of some kind? Are they all mainly QA? Regardless of that, the list of 61 employees we know of is still a pretty big hit to the game. A lot of those people were responsible for every piece of content released for the past 5 years, and even longer than that for some.

Arunei · July 9

Estin wrote: »

Marto wrote: »

Eldovar wrote: »

Apparently 213 workers were laid off according to the official WAN notice. That's a HUGE list.

More info: https://www.reddit.com/r/elderscrollsonline/comments/1ur8ejn/warn_notice_states_that_213_workers_were_laid_off/

This is absolute insanity.

They're reducing the size of the studio by more than 2/3. They want this game to be worked on by less than 100, maybe even less than 50 people. How is that feasible?? How is that a way to treat one of the highest earning games under the Bethesda umbrella???

These layoffs cannot be allowed to go through. At what point does studio leadership stand up and do something? If not now, when? When they cut the studio in half for a third time?

Are you seriously going to just sit there and let your parent company destroy nearly 20 years of your work?

I was reading the comments in that post, and apparently according to linkedin, ZOS had anywhere from 437 to 494 employees as of June 2026. That means after the layoffs, ZOS has anywhere from 224 to 281 employees left. If that is true, then the situation isn't ask bleak as it seems. And if I understand the WARN act correctly, then that means they have 60 days before they're effectively laid off, and with some possibility of being rehired. The only question is, who are those employees and what did they do? Were that many in office or were they contractors of some kind? Are they all mainly QA? Regardless of that, the list of 61 employees we know of is still a pretty big hit to the game. A lot of those people were responsible for every piece of content released for the past 5 years, and even longer than that for some.

I actually had a realization just now, and I hope this is okay to talk about but I'm not sure so if this gets snipped I won't be surprised.

Katherine said initially that half the team had been let go. Then she clarified to say it was roughly half the active dev team. So that roughly means that yeah, we could have anywhere between 200-300 people left in the dev team. BUT!

The rest of ESO's team may be untouched. And even if some of them were hit too, the thing is I don't think there are any actual numbers of ESOs team overall. It could have been considerably more than 500, including all the devs and everyone who was let off. Without actual hard numbers from a reliable source, we can't really know for sure.

The reason I bring it up is because people in other sections of the game, like marketing for example, could very well get shuffled around to internally fill some of the spots that were left and help ease the load on the remaining devs. People who might have been skilled in a number of different things, you know? It's been pointed out that a non-trivial number of those we know by name were let go were also high on payroll. Senior people, things like that. Maybe some of those people were let go because of their salaries but the positions aren't closed per se, just, again, being filled by people from other teams with experience in things like level design or writing?

I don't know, obviously. It's just a thought I had. I could be entirely wrong. We'll just have to see what comes.

kind_hero · July 9

I resonate with all the warm wishes expressed here. If there is nothing to do about the layoffs, I mean the people in the list to come back, I want to reiterate something which I think is really important for the future:
please, please, listen to your community. Listen to the feedback given, because we need you to have this wonderful game running, but you also need us, and our numbers to be high, to keep going.

Best wishes!

Firstmep · July 9

Valion wrote: »

I just came to enjoy Asha Sharma professional vita.
Well, let's say, she knows how to ride a wave, and yet, that doesn't make her a surfer.
I have not seen anyone that young of age having fired soooo many people already.

Oh.
And she just recently started playing console games, too!
I am glad our beloved game is in caring hands,
experienced in the gaming industry.
Not.

She certainly has the corpo speak down to

Stamicka wrote: »

shadoza wrote: »

A.I. has very little, if anything, to do with the down-sizing. The profits for ZeniMax were just too low to continue with out change. The employee lay-offs were part of a rebalancing of talent. Too many positions were being duplicated so the CEO removed some of the positions. Those that remain will be focusing on working titles from what the CEO explained.

Would not be surprised at all if it had a lot to do with the down sizing. More money is needed for the money furnace that is AI infrastructure build out. So since Microsoft is so big they'll cut things from any corner of the company to get it. If you think profits for Zenimax are too low you'll be stunned at how unprofitable AI is. Yet they rush head first into it anyway.

AI is wildly profitable right now since it sucks up investor funding like nothing else.
Ofc the actual LLM products and the data centers are an endless money pit, but I mean we're at a point now where peoples 401ks are being sucked into the endless money pit called ai.

amuridee · July 9

Please don't let "ESO" end up with the same fate as "New World".

My friends and I are ESO players from Indonesia. Some of us have known each other for years through the game, even though we've barely, if ever, met in real life. Yet we've built genuine friendships because of ESO.

We got through the COVID-19 pandemic together. We also stayed through the quiet years when almost all of our ESO friends retired from the game. We kept hoping they would return someday, and thankfully, a few of them did.

ESO is more than just a game to many of us. It's a place where friendships were formed, memories were made, and communities have lasted for years.

Please continue making decisions that keep the game healthy and enjoyable for both new and veteran players. We want ESO to keep growing for many more years, not slowly lose the community that has made it so special.

Thank you for everything you've done over the past decade, and I hope ESO has an even brighter future ahead.

aetherix8 · July 9

Jeremy wrote: »

AzuraFan wrote: »

Jeremy wrote: »

It's a gamble but I've always felt the corporate stranglehold on gaming was detrimental to the industry. Bringing in more independent creators could improve quality and change the industry as a whole for the better.

There are already a lot of independently-developed games. And I hate to say it, but most of them are dreck (everyone knows Steam is filled with indie projects that suck. I honestly wish Steam would curate their games more). But at least they were produced by people who put in the blood, sweat, and tears, and some of those people learn from the experience and go on to work on great games.

Yes, there are really fantastic independent studios like Larian and others. But they consist of teams doing hard work in the trenches. They aren't a single person in a home office using an AI to design AND code AND test a game that has zero chance of competing with AAA releases. To even suggest that is ludicrous.

Is it possible to produce art and stories etc. with AI? Yes. Do I want to read a story by an LLM that has no understanding of what it means? No thanks. Do I want to see art produced by an AI? No. And that includes in games. I want to support humans, and the way humans have always expressed themselves through art, whether through music, visual arts, literature, whatever.

If I read a non-fiction book about someone who endured and survived cancer, I want it to be written by someone who has had cancer, not someone who has never had it but typed in, "write me an outline of a non-fiction book about surviving cancer and then write the book." Dreck. Worthless dreck. I don't want to read stories and dialogue written by an algorithm that has less human experience than a one-second-old baby. If I want to listen to music, I want to hear stuff that was conceived in a person's head, not by someone with no talent who used an AI to produce music. Same goes for art or any other creative work.

If AI didn't have such a terrible environmental impact and wasn't putting talented people out of work, I would support its use as a tool for the menial, uncreative stuff. But alas.

Be careful when you wish for that AI utopia. Spoiler alert: It doesn't, and will never, exist.

I'm not sure why you directed this post at me because it's the opposite of what I am saying.

I am talking about big studios hiring independent creators to work on their games (not compete against them). And I think that is a good thing for the industry as a whole. The MMORPG market has become stagnated under corporate control and this has the potential to shake things up.

It sucks that people lost their job. But I do think it is a good business strategy to take advantage of all the talent out there among small creators who absolutely are capable now of designing games using AI. Those who believe they aren't, are just wrong, and hitting agree over and over again on a forum when people say they aren't doesn't change that realty. You no longer need a large team at a corporation to design video games.

I don't believe in an AI utopia. But I do believe AI can give people the tools they need to be more productive and accomplish things in video game development they couldn't just a few years ago. Because it already has.

They just laid off roughly half of the team to cut costs, why would they hire anyone at all? It doesn’t make sense. They can just put in-house AI to fill in; there’s no reason to hire new people whatsoever. But in terms of creativity, originality, and authenticity, AI content will be fairly unappealing I’m afraid. Only the doubt as to whether a story quest was written by a human takes a lot of value away from the game. That’s not something suits can comprehend, unfortunately.

baratron · July 9

Finedaible wrote: »

I'm not devaluing anyone else, but I feel like losing Mike Finnigan will have the most negative impact of all. He has shown to have exceptional knowledge of his role in ESO's development of content.

Hard agree. Finn's an amazing developer who has always demonstrated not only knowledge of his own section (monsters, encounters, bosses, Dungeons, Trials, the Night Market, Challenge Difficulty etc.) but also an excellent understanding of how his part of the game fits into the rest. Think about what goes into dungeon design. He's always had to have direct contact with the combat team, the art team, the sound team, the zone lead, the writing team, UI design (e.g. adding grappling poles), pathing, etc.

Every time I've talked to him he's impressed me with his understanding of the entire game. And I know that he and the Dungeons/Encounters team have always hung around during public play tests of new Dungeons/Trials at ESO events, and watched videos of PTS attempts to see how players get on. I've seen them at the events and received comments on my videos.

Honestly, we at UESP always joked about how Finn's knowledge of Lore was a bit ropey ("Finn Lore (TM)"), but I'd hope it was meant affectionately because it was basically the only thing he wasn't good at. Elder Scrolls Lore is ridiculously complex and esoteric, and he understood it well enough for the purposes of Dungeon design. If his explanations on ESO Live were sometimes a bit wrong, well, that's what the Loremaster and writing team are for, right?

Also, no one could play the Undaunted theme song ("Who knows no fear of beast or blade? UNDAUNTED! UNDAUNTED!) better on a cheap plastic kazoo. And he was one of the few ZOS staff members who would hang out with the community in the evening after the event was over (Gina was, of course, the other).

I'm making it sound like he's dead and this is an obituary. Of course, he still has lots of career ahead of him and I hope he'll go on to do fantastic things at another company not owned by Microsoft. But in terms of sheer [snipped] loss to ESO as a game and us as a community, he's probably the very biggest of all.

baratron · July 9

Jeremy wrote: »

OutLaw_Nynx wrote: »

Mariah’s m

Marto wrote: »

Eldovar wrote: »

Apparently 213 workers were laid off according to the official WAN notice. That's a HUGE list.

More info: https://www.reddit.com/r/elderscrollsonline/comments/1ur8ejn/warn_notice_states_that_213_workers_were_laid_off/

This is absolute insanity.

They're reducing the size of the studio by more than 2/3. They want this game to be worked on by less than 100, maybe even less than 50 people. How is that feasible?? How is that a way to treat one of the highest earning games under the Bethesda umbrella???

These layoffs cannot be allowed to go through. At what point does studio leadership stand up and do something? If not now, when? When they cut the studio in half for a third time?

Are you seriously going to just sit there and let your parent company destroy nearly 20 years of your work?

I think they fired the studio leadership…

They closed several down I believe.

I did some quick research and what I suspected was true. They are betting on using independent creators to pick up the slack to save on costs. I expect more studios will follow.

If that were true, then why did Microsoft lay off the guy in charge of the Creations Program at Bethesda? That's the closest thing thus far to "using independent creators", writing a specific contract and NDA to allow a talented community member to develop content for a game such as Skyrim.

kafedristoran · July 9

I thought it was around 100-150 but it is 213....
wtf.... macroslop, it is almost 2/3 of the studio

baratron · July 9

Catariah wrote: »

Now I keep thinking back to the ESO anniversary event in Amsterdam in 2024 (easily one of the best events in my whole life), and all I feel is emptiness. It breaks my heart to realize that most of the people who stood on that stage, sharing their stories about building this game (some of them literally since 2007), are simply gone from ZOS now. Matt Firor, Rich Lambert, Gina Bruno, Mike Finnigan, Ed Stark… and so many others.

Absolutely. I've been privileged enough to have attended a fair number of events over the years, representing UESP and going to meet my friends. I sat there looking at my unpublished notes from the Amsterdam event (which were supposed to have gone on the UESP Blog but I literally collapsed with exhaustion for a couple of weeks after the event) and I couldn't get over how many of the veterans have gone.

There was one panel with Matt Firor, Bill Slavicsek, Ed Stark and The Mighty LOREnce Schick (a.ka. Former Loremaster Lawrence Schick) where there was over a hundred years of experience in the gaming industry (both tabletop and computer games) among those four guys alone. And they were all wonderful, approachable people (if massive nerds - but who in that room wasn't?) without egos at all.

I can tell, and have told, several stories on this forum alone of times when Matt Firor demonstrated his compassion and tolerance for human variation - his respect for people, and his desire to have stories within ESO include the full spectrum of humanity, including disabled and LGBTQ folk. I never felt that it was just lip service from him - that he really did care about people in all their different flavours, and wanted all of us to feel represented by characters in the game.

Catariah wrote: »

I’m also a little sad that I missed the previous ESO Taverns in Germany, because I don’t think we'll ever see anything quite like them again. This year's Tavern is bound to be more of a somber event than a celebration, but I still regret not signing up, since this might be the last time...

Let's be real: the era of such events is probably over. Without this team, it just won't be the same. Sure, the game is still here, the servers will stay up, and the corporate machine will keep turning. I do truly hope, despite everything, that ESO survives this and that we don't lose what's been built here over more than a decade. But I can't shake the feeling that with the loss of all these people, the game might have just lost a piece of its soul.

I'm sitting in a hotel room in Paris right now, and in a few minutes we're going to the airport to collect my long-term partner who I met as a guildie some 12 years ago, and then we're driving to Germany for the Tavern. Jason Barnes and Jessica Folsom will be there representing ZOS, but I'm.not sure offhand whether any of the other Devs who are currently still employed will be there. Apparently most of them are working on the revised Roadmap.

I've been feeling like this might be the last Tavern for a few weeks now. I'm hoping I'm wrong, even if it has to return from the three days in a castle to a one-day in a pub type of event. I'm hoping that the German team are able to at least make it break even, and justify its continuation to the bean counters at Microsoft.

I'm hoping we all have a great time even if our hearts are broken by the knowledge that so many are missing.

ApoAlaia · July 9

baratron wrote: »

Jeremy wrote: »

OutLaw_Nynx wrote: »

Mariah’s m

Marto wrote: »

Eldovar wrote: »

Apparently 213 workers were laid off according to the official WAN notice. That's a HUGE list.

More info: https://www.reddit.com/r/elderscrollsonline/comments/1ur8ejn/warn_notice_states_that_213_workers_were_laid_off/

This is absolute insanity.

They're reducing the size of the studio by more than 2/3. They want this game to be worked on by less than 100, maybe even less than 50 people. How is that feasible?? How is that a way to treat one of the highest earning games under the Bethesda umbrella???

These layoffs cannot be allowed to go through. At what point does studio leadership stand up and do something? If not now, when? When they cut the studio in half for a third time?

Are you seriously going to just sit there and let your parent company destroy nearly 20 years of your work?

I think they fired the studio leadership…

They closed several down I believe.

I did some quick research and what I suspected was true. They are betting on using independent creators to pick up the slack to save on costs. I expect more studios will follow.

If that were true, then why did Microsoft lay off the guy in charge of the Creations Program at Bethesda? That's the closest thing thus far to "using independent creators", writing a specific contract and NDA to allow a talented community member to develop content for a game such as Skyrim.

I didn't want to knock on Kinggath's door at this time when all news are bad news but I hope that this is not going to throw a wooden clog in his machine (in relation to you mentioning that they let go the person in charge of the Creations Program).

Him and his team have put a lot of love, sweat, tears and enthusiasm in what they do. I'd loathe to see that compromised.

Either way personally I find this line of speculation fruitless; the reality is that there is no way to know what 'the plan' is and in all likelihood 'we' (not the royal 'we' but as in 'the public') are not going to be let 'in the know' by Xbox/MS.

Unless one of the few journalists left worth their salt goes digging chances are we will have to just wait and see what they do to find out more.

JasonThoth · July 9

AScarlato wrote: »

The WARN Act numbers made me more pessimistic than I already was.

This is incredibly unfortunate.

While things seem fine for the next 2 months because things were nearly done being developed, I have no idea what things will look like after that.

I was pessimistic as soon as I read the post from former developer Andrew Young on X:

"I’ve been gone for a while, but talking to people today and realizing there’s really no one left and no changing it now makes my heart ache. For the people, our game, who we were as a team and a studio. This is a serious loss, and I don’t think people know how much."

If there truly is almost "no one left" then the game is essentially dead at this point. Planned future updates will now take considerably longer to deliver, and the game will quickly start feeling stale.

Pixiepumpkin · July 9

I knew this was going to happen based on the closure of chapters coupled with the subclassing update.

The best advice I can give is wish the best for the devs who are people and who have families and mouths to feed, but lose the fanboysim and pure support for the parent company. Introduce some skepticism in your life (because more often than not that skeptical thesis of a given situation is the right one) with these tools you should now be able to read between the lines and make pretty accurate predictions. Stop thinking companies give two hoots about you, they don't. You are a literal number and they only care about your wallet. Sad this has to be said, when its so blatantly obvious, yet it goes right over the heads of many if not most people.

Going forward support small NON publically traded studios/games. THEY care about their player base, but the second the game has to show "10% groth over the prior year" you can bet your bottom dollar that the decisions made for the game will be made for profit first, even at the cost of fun.

code65536 · July 9

Firstmep wrote: »

AI is wildly profitable right now since it sucks up investor funding like nothing else.

The first part of that statement is 100% false. AI is wildly, insanely unprofitable. Recently, the press reported on OpenAI's leaked financials. Their revenue grew impressively from $3.7B to $13.07B from 2024 to 2025, but their operating losses grew just as impressively from $8.78B in 2024 to $20.92B in 2025.

Let that sink in for a moment... OpenAI's losses in 2024 is more than the $7.5B Microsoft paid to buy Bethesda. Their losses in 2025 were enough to buy nearly three Bethesdas.

This is why AI is a bubble. Companies are pouring money into AI even though it is INSANELY unprofitable. There is this myth that somehow AI will turn from this giant money-loser into a giant money-maker, but there is absolutely no sign of this happening. Ford recently was forced to rehire engineers when they realized that the AI that replaced them was doing a worse job and ultimately costing them more.

A big part of the fast adoption of AI is how companies like OpenAI and Anthropic were subsidizing its use. They charged subscriptions, where people would pay something like $100 a month, but the amount of compute that they used would cost the company $1000 per month, which is why these companies are losing money hand over fist. The deeply unpopular announcement of GitHub CoPilot's pricing model going from an "all you can eat" subscription to "a la carte" is them trying to get people to pay the actual costs, but the result is people suddenly realizing just how expensive AI actually is and abandoning GitHub CoPilot in favor of a service that still offers these money-losing all-you-can-eat subscriptions.

One example that is widely reported is Uber. When Anthropic forced their business customers to pay for actual usage instead of a cheap money-losing subscription, Uber blew through their entire annual AI budget in just a few months and are now pulling back on AI. And even Nvidia admitted that AI costs more than humans (the only reason people like Jeremy here don't realize that is because these AI companies are losing tens of billions every year to shield people from the true cost so that they can maintain the myth that LLMs will soon take over the world).

LLMs are not profitable, not even close. They are insanely expensive and inefficient, on top of being actually bad because of their inherent hallucinatory nature (which OpenAI admitted in a research paper is an unsolvable problem because of how LLMs work on a fundamental level). But billions are being poured into it each year because this is the tulip of the 2020's.

ApoAlaia · July 9

code65536 wrote: »

Firstmep wrote: »

AI is wildly profitable right now since it sucks up investor funding like nothing else.

The first part of that statement is 100% false. AI is wildly, insanely unprofitable. Recently, the press reported on OpenAI's leaked financials. Their revenue grew impressively from $3.7B to $13.07B from 2024 to 2025, but their operating losses grew just as impressively from $8.78B in 2024 to $20.92B in 2025.

Let that sink in for a moment... OpenAI's losses in 2024 is more than the $7.5B Microsoft paid to buy Bethesda. Their losses in 2025 were enough to buy nearly three Bethesdas.

This is why AI is a bubble. Companies are pouring money into AI even though it is INSANELY unprofitable. There is this myth that somehow AI will turn from this giant money-loser into a giant money-maker, but there is absolutely no sign of this happening. Ford recently was forced to rehire engineers when they realized that the AI that replaced them was doing a worse job and ultimately costing them more.

A big part of the fast adoption of AI is how companies like OpenAI and Anthropic were subsidizing its use. They charged subscriptions, where people would pay something like $100 a month, but the amount of compute that they used would cost the company $1000 per month, which is why these companies are losing money hand over fist. The deeply unpopular announcement of GitHub CoPilot's pricing model going from an "all you can eat" subscription to "a la carte" is them trying to get people to pay the actual costs, but the result is people suddenly realizing just how expensive AI actually is and abandoning GitHub CoPilot in favor of a service that still offers these money-losing all-you-can-eat subscriptions.

One example that is widely reported is Uber. When Anthropic forced their business customers to pay for actual usage instead of a cheap money-losing subscription, Uber blew through their entire annual AI budget in just a few months and are now pulling back on AI. And even Nvidia admitted that AI costs more than humans (the only reason people like Jeremy here don't realize that is because these AI companies are losing tens of billions every year to shield people from the true cost so that they can maintain the myth that LLMs will soon take over the world).

LLMs are not profitable, not even close. They are insanely expensive and inefficient, on top of being actually bad because of their inherent hallucinatory nature (which OpenAI admitted in a research paper is an unsolvable problem because of how LLMs work on a fundamental level). But billions are being poured into it each year because this is the tulip of the 2020's.

The general consensus seems to be that at this point in time everything/everyone who has existentially tied itself/themselves to LLMs - across the entire chain including supply and infrastructure - are all in to prevent investor interest from waning; which is to say, a bubble.

It is at this point in time however as beneficial a commodity as sub-prime mortgages were a couple of decades ago.

Dimorphos · July 9

If this is not fake news then that is disturbing and a long list of names indeed..

1. Might be that MS is taking ESO seriously and want really massive changes ( step by step making ESO become ESO 2.0) and they now feel that old staff is standing in the way of that change. Sometimes this kind of solution might be a good thing for the company/product.

2. Might be that they are implementing more AI focused upkeep and firing staff is a way to grow income with less human hours effort. This is generally a very bad thing. AI is a great tool when used carefully, but making it the main thing and surpassing all human involvement is really bad thing.

3. Might be that they have come to the conclusion that this game will not grow bigger and more active no matter what and they feel it is a title no longer worth keeping alive. Cashing out and firing staff then finally giving an end date. If this is the case I would feel truly angry because of all the money and effort I put into my account and creating a guild with all the services was no small task..

We will hear soon of this officially, hope it is not something too dramatic.

Malprave · July 9

Dimorphos wrote: »

If this is not fake news then that is disturbing and a long list of names indeed..

1. Might be that MS is taking ESO seriously and want really massive changes ( step by step making ESO become ESO 2.0) and they now feel that old staff is standing in the way of that change. Sometimes this kind of solution might be a good thing for the company/product.

2. Might be that they are implementing more AI focused upkeep and firing staff is a way to grow income with less human hours effort. This is generally a very bad thing. AI is a great tool when used carefully, but making it the main thing and surpassing all human involvement is really bad thing.

3. Might be that they have come to the conclusion that this game will not grow bigger and more active no matter what and they feel it is a title no longer worth keeping alive. Cashing out and firing staff then finally giving an end date. If this is the case I would feel truly angry because of all the money and effort I put into my account and creating a guild with all the services was no small task..

We will hear soon of this officially, hope it is not something too dramatic.

Might be... that they are moving most work on the game to their office in Budapest Hungary. Or one of their three or four other offices.

Pixiepumpkin · July 9

Dimorphos wrote: »

If this is not fake news then that is disturbing and a long list of names indeed..

1. Might be that MS is taking ESO seriously and want really massive changes ( step by step making ESO become ESO 2.0) and they now feel that old staff is standing in the way of that change. Sometimes this kind of solution might be a good thing for the company/product.

2. Might be that they are implementing more AI focused upkeep and firing staff is a way to grow income with less human hours effort. This is generally a very bad thing. AI is a great tool when used carefully, but making it the main thing and surpassing all human involvement is really bad thing.

3. Might be that they have come to the conclusion that this game will not grow bigger and more active no matter what and they feel it is a title no longer worth keeping alive. Cashing out and firing staff then finally giving an end date. If this is the case I would feel truly angry because of all the money and effort I put into my account and creating a guild with all the services was no small task..

We will hear soon of this officially, hope it is not something too dramatic.

This is most likely the closest to being the correct version.

From a company perspective, ESO makes pennies. MS most likely wants to invest that money elsewhere that in their minds will have a greater ROI.

Pixiepumpkin · July 9

Malprave wrote: »

Dimorphos wrote: »

3. Might be that they have come to the conclusion that this game will not grow bigger and more active no matter what and they feel it is a title no longer worth keeping alive. Cashing out and firing staff then finally giving an end date. If this is the case I would feel truly angry because of all the money and effort I put into my account and creating a guild with all the services was no small task..
.

This is most likely the correct version. When did we stop being able to edit posts?
Sorry for the double post.

hiyde · July 9

run your mouse pointer *just to the left* of the post # and timestamp at the top right and you'll find the invisible link. (the icon image is gone but the hotspot & edit link remain).

Same with the black strip up top with inbox and other icons.

CAB_Life · July 9

code65536 wrote: »

Firstmep wrote: »

AI is wildly profitable right now since it sucks up investor funding like nothing else.

The first part of that statement is 100% false. AI is wildly, insanely unprofitable. Recently, the press reported on OpenAI's leaked financials. Their revenue grew impressively from $3.7B to $13.07B from 2024 to 2025, but their operating losses grew just as impressively from $8.78B in 2024 to $20.92B in 2025.

Let that sink in for a moment... OpenAI's losses in 2024 is more than the $7.5B Microsoft paid to buy Bethesda. Their losses in 2025 were enough to buy nearly three Bethesdas.

This is why AI is a bubble. Companies are pouring money into AI even though it is INSANELY unprofitable. There is this myth that somehow AI will turn from this giant money-loser into a giant money-maker, but there is absolutely no sign of this happening. Ford recently was forced to rehire engineers when they realized that the AI that replaced them was doing a worse job and ultimately costing them more.

A big part of the fast adoption of AI is how companies like OpenAI and Anthropic were subsidizing its use. They charged subscriptions, where people would pay something like $100 a month, but the amount of compute that they used would cost the company $1000 per month, which is why these companies are losing money hand over fist. The deeply unpopular announcement of GitHub CoPilot's pricing model going from an "all you can eat" subscription to "a la carte" is them trying to get people to pay the actual costs, but the result is people suddenly realizing just how expensive AI actually is and abandoning GitHub CoPilot in favor of a service that still offers these money-losing all-you-can-eat subscriptions.

One example that is widely reported is Uber. When Anthropic forced their business customers to pay for actual usage instead of a cheap money-losing subscription, Uber blew through their entire annual AI budget in just a few months and are now pulling back on AI. And even Nvidia admitted that AI costs more than humans (the only reason people like Jeremy here don't realize that is because these AI companies are losing tens of billions every year to shield people from the true cost so that they can maintain the myth that LLMs will soon take over the world).

LLMs are not profitable, not even close. They are insanely expensive and inefficient, on top of being actually bad because of their inherent hallucinatory nature (which OpenAI admitted in a research paper is an unsolvable problem because of how LLMs work on a fundamental level). But billions are being poured into it each year because this is the tulip of the 2020's.

Your entire argument exists on the idea that AI will stay in the current state of competence that is has today. When, in fact, even as I type this sentence it has evolved workflows, competencies and new chains. That’s just how it works—it’s objectively better than pure human output, especially when paired with a talented human who understands LLMS, workflows and app side integrations. Again, Chinese game developers are already using AI—to great success—in 99% of their output. Will there be a massive upfront investment with many failed investors, startups and gold-rush like fails? Of course. Does it need to be profitable? No, it will be invested in regardless until it is profitable or has achieved the market penetration these companies seek. Profitability will come once the expansionism and growth slows. That is just the reality of it. A year ago, it was common to see AI art with six fingers. Now you almost never see anatomical inconsistencies. The very nature of machine learning is that it is constant, perpetual and inclined toward optimization. The machines will get there despite humanity’s best efforts to be chaotic and disruptive. Google has some very disturbing internal data that they’ve done their best to bury on how advanced the REAL models are, which we have no access to. If I recall AI pioneer and former Google researcher Geoffrey Hinton issued some doomsday like warnings regarding the tech. Still, I’d like to think we’ll end up somewhere closer to the late Ian M. Bank’s vision of AI than anything apocalyptic.

Will the cost in energy continue to climb? All signs point to no, as every piece of technology, once past the growing pains enters a period of refinement and resource management/ efficiency. Part of the issue is many Western economies have spent 10 or 20 years strangling their resource sectors for ideological goals, and now they’re suddenly about-face and thirsty for power. Mark Carney, king of eco-economics and his sudden thirst for pipelines, oil and nuclear reactors such is the clearest indicator of this. He literally wrote a book on climate economies and the need for less power, less footprints, less tech. Anyway, this isn’t a political discussion, and I’m only mentioning the above for purposes of AI/ energy/ cost.

There are a lot of people from the (justifiably) fearful to outright Luddites who will decry this technology, but it is here, it will be ubiquitous and it will be baked into every facet of your life and workplace whether you want it or not. I’m not an advocate of this level of presumptive need or enforcement, personally, and as an artist I have found this change jarring and unsettling (though I am learning to adapt). I am, however, a realist about where we will be with the tech in 10 years.

Gabriel_H · July 9

While I feel for the people who lost their jobs, from a perspective of what the future holds this isn't as cut and dry as some here seem to think.

Yes, Microsoft slashed and burned in the name of profit, but they have been quite targetted in that. They have closed a couple of studios that worked on less popular franchises, and as yet we don't have the full picture on the pivot to focus on more popular franchises like Elder Scrolls will be.

ESO is a very profitable game for Microsoft. It has an astonishingly high rate of return. It wouldn't make sense financially to shutter the game, but they are at present somewhat undermining the future of it. Whether they take the closed studios and use that to consolidate some of the roles that ZOS are losing remains to be seen.

AzuraFan · July 9

Jeremy wrote: »

I'm not sure why you directed this post at me because it's the opposite of what I am saying.

I directed it to you because you seem to think that AI is going to somehow give independent creators jobs, and you're oblivious to the fact that you're talking about it in a thread about people who have lost their jobs. You're also failing to see that when it comes to creative endeavours, most people want stuff created by humans. Sure, you can use AI tools to help you. But that isn't what businesses want. They want AI to do it for them. They want someone with no talent to type in, "i want a scene with a sun with an arrow through it, with pink smurfs holding hands underneath it and a dog with a banjo", and bam, you get a digital image of exactly that. From someone with ZERO talent in creating art. Nobody wants that except talentless hacks and business people who only care about money.

CAB_Life wrote:

There are a lot of people from the (justifiably) fearful to outright Luddites who will decry this technology, but it is here, it will be ubiquitous and it will be baked into every facet of your life and workplace whether you want it or not. I’m not an advocate of this level of presumptive need or enforcement, personally, and as an artist I have found this change jarring and unsettling (though I am learning to adapt). I am, however, a realist about where we will be with the tech in 10 years.

Me too. As I said in a post upthread, I don't mind AI being used in some areas, and it does have a role in helping creatives to do their thing (for example, grammar checking text). But when it comes to AI generating an entire creative work from a prompt, where a human basically just checks the result or makes tweaks. Nope. The best we can do is not support stuff produced that way with our wallets. Eventually few will be buying the stuff anyway, because fewer people will have anything in those wallets, given all the job losses.

Part of the issue is many Western economies have spent 10 or 20 years strangling their resource sectors for ideological goals, and now they’re suddenly about-face and thirsty for power. Mark Carney, king of eco-economics and his sudden thirst for pipelines, oil and nuclear reactors such is the clearest indicator of this. He literally wrote a book on climate economies and the need for less power, less footprints, less tech.

Mark Carney going back on his principles at this point in time has nothing to do with AI and everything to do with the US and Alberta at this moment in time. To suggest otherwise is to not understand what's driving his decisions at the moment. (I'll say no more on politics)

Gabriel_H · July 9

ToddIngram wrote: »

This combined with last years layoffs makes me very concerned for the future. I don't see how ESO continues like this.

The previous layoffs centred around project Blackbird that had siphoned off the more experienced team members, and was Firor's vanity project. Some of those layoffs were then re-instated and moved back to working on ESO. It was a boon for ESO as the studio could then focus on a proven game.

This current round of layoffs is a little concerning given some of the more senior team members and the areas they oversee . However, looking down that list I see a lot of positions that directly tie to some of the biggest complaints that are regularly posted on these forums.

The layoffs are headline grabbing, what isn't is what comes next in terms of corporate actions. Things like consolidation of VFX and QA testing into outsourced divisions. What that means for the future I cannot say, and only time will tell.

code65536 · July 9

CAB_Life wrote: »

Your entire argument exists on the idea that AI will stay in the current state of competence that is has today.

And your entire argument rests on the assumption of "line goes up now, so line must go up indefinitely". Which is wildly incorrect. LLMs are a dead end and they are not the path to AGI. What is the path to AGI? I don't know because nobody knows, but it's not LLMs.

The first problem is that language models don't understand anything. They're just statistical models that spews out sequences of words (or code or whatever). Someone got the idea a number of years ago to see what would happen if the language model was given more data. Way more data. And suddenly, we got this thing that amazed people with the "intelligence" that it showed. But it's not actual intelligence because, again, it's not capable of understanding or reasoning or knowing. It is damned good at producing output that mimics the output of something that can understand or reason.

But it was impressive nonetheless, and people got excited. What if we threw it even more data? That's when charlatans like Sam Altman proclaimed that this was the path to AGI, and that it's a race. Achieving AGI is just a matter of reaching a critical mass of data and training, and the first company to reach this critical mass will be the first company to achieve AGI and change the world as we know it, so please invest.

And so they got money. Expanded their model. Sucked up even more data, and ChatGPT 4 was better, so he must be right! More! More! Except there are a lot of people who do understand what language models are who are skeptical. But hype drowns out everything. And then came ChatGPT 5, which is many times larger than 4... and it was barely any better than 4.

And as more and more people use LLMs, they start discovering the limits of a system that is fundamentally incapable of understanding or reasoning. A LLM is good at creating results that fool people into believing that it can understand or reason but it is--and never will be--capable of such a thing.

Now their solution is to have multiple layers of LLMs, each checking each other and calling it "agents", and sure, it has improved the efficacy of this charade, but it has also dramatically increased its cost.

The models now are costlier to train, costlier to run, and barely any better. The improvements that we see, like with the latest frontier Claude Code agents, come at enormously increased costs.

So, no, your assumption is the one that's wrong, and the evidence for that is already out in the open.

Maybe there will be a different approach to AI in the future that will actually bring about AGI. I have no idea what that would be (and if I did, I'd be a trillionaire), but I can tell you with great confidence that it sure as hell isn't going to be the current LLM nonsense.

Gabriel_H · July 9

code65536 wrote: »

And as more and more people use LLMs, they start discovering the limits of a system that is fundamentally incapable of understanding or reasoning. A LLM is good at creating results that fool people into believing that it can understand or reason but it is--and never will be--capable of such a thing.

Just to add: An LLM's are also good at keeping people engaged, by re-affirming the person's prior beliefs. Which is the real danger, and has had real world consequences.

tomofhyrule · July 9

Gabriel_H wrote: »

code65536 wrote: »

And as more and more people use LLMs, they start discovering the limits of a system that is fundamentally incapable of understanding or reasoning. A LLM is good at creating results that fool people into believing that it can understand or reason but it is--and never will be--capable of such a thing.

Just to add: An LLM's are also good at keeping people engaged, by re-affirming the person's prior beliefs. Which is the real danger, and has had real world consequences.

This, and people aren’t worried enough about this.

I thought Twitter/X/whatever it’s called this week and various internet echo chambers of their ilk have already shown the damage that rejecting “others” can do, and now we have sycophantic glazebots on demand who can offer addiction and delusion with a single click.

Welcome to the future! It sure is looking bright!