Fallout 5 Greenlit After MMO Gets Canceled Behind the Scenes

Fallout 5 is finally happening. According to trusted sources in the latest episode of the Xbox Two podcast, the game has been officially greenlit. But development on the next major Fallout title is still in very early stages, and it’s unclear who exactly is building it. What’s certain is that Microsoft has reshuffled its investments behind the scenes, choosing Fallout over a different project.

The tradeoff? ZeniMax Online’s unannounced sci-fi MMORPG, codenamed “Blackbird,” is now dead. The long-running internal project, which had been quietly in development since 2018, was shelved during the latest wave of mass layoffs across Microsoft. That cancellation wasn’t just a financial move—it was also a strategic one. Fallout is a proven franchise with renewed public interest, especially after Amazon’s successful TV adaptation. Investing in it now is safer than building a brand-new IP from scratch.

“Do we want to sink a ton of money into getting this to a point where it can compete with the established players in the market, or do we want to allocate that investment towards making Fallout 5?”

That quote comes from Jez Corden, executive editor at Windows Central, who spoke on the podcast. He made it clear the decision wasn’t made lightly. MMOs are expensive to create, and the chances of carving out space next to giants like World of Warcraft are slim. Microsoft had to bet on what it already knew could deliver.

This news aligns with what’s been building for months. The Fallout TV series on Amazon, starring Walton Goggins, has sparked new demand for Fallout content. Fallout 76 saw a resurgence in active players after the show aired. Fallout 3 Remastered is also reportedly in the works, though still far from release. Meanwhile, Fallout 5 had long been assumed to be on the way—but now there’s finally confirmation it’s moving forward, even if it’ll take years to arrive.

Still, the Fallout 5 release date remains far off. That’s partly because Bethesda Game Studios, the core development team behind most Fallout and Elder Scrolls titles, is currently swamped. The team is working on Starfield DLC and pre-production for The Elder Scrolls VI, so Fallout 5 isn’t their top priority—at least not yet.

Todd Howard, the studio head, has said before that he doesn't like putting dates on projects. And for good reason. Elder Scrolls VI was announced back in 2018 and still doesn’t have a release window. Fallout fans should expect a similar long wait.

In the meantime, there's still a lot happening in the Fallout universe. Fallout 3 Remastered, although still unconfirmed, is being talked about by insiders like NateTheHate2. He recently stated that the remaster is “planned but won’t be for a while.” That alone has kept speculation alive. Fallout 3 originally launched in 2008 and remains one of the most critically acclaimed titles in the series. Bringing it to modern platforms could serve as a stopgap while Fallout 5 is in development.

The situation with ZeniMax Online’s canceled MMO also adds important context. Project Blackbird was said to be running on a new engine and was shaping up to be ZeniMax's first new IP since The Elder Scrolls Online. It had reportedly passed internal reviews and was ramping up production earlier this year. Then came Microsoft’s July wave of layoffs, which saw thousands lose their jobs, including a large portion of staff at ZeniMax.

Reports from Bloomberg revealed that some employees only found out they were laid off after being locked out of company systems like Slack. There was no formal communication in some cases, just silence and a disabled login. Matt Firor, the long-time president of ZeniMax Online, announced his departure from the company shortly after the project was canned. The layoffs also affected Rare, with reports indicating that its game Everwild has also been canceled following several reboots since its 2019 announcement.

Microsoft Gaming CEO Phil Spencer described these moves as “tough decisions” made to secure the future of Xbox. He called the platform’s roadmap stronger than ever, even as entire projects and teams were cut to make room for that future. Fallout now sits at the center of that strategy.

Fans hoping for faster Fallout news might get some relief from side projects. Fallout is likely heading down the same path: a remastered Fallout 3 here, some new Fallout 76 content there, and eventually, the full return with Fallout 5.

But don’t expect trailers or gameplay footage anytime soon. If the project was just greenlit, pre-production could stretch deep into 2026, especially if Bethesda isn’t the lead developer. It’s still possible another studio under Xbox could take the reins, similar to how Obsidian handled Fallout: New Vegas. But for now, the only confirmed fact is that Fallout 5 is officially on its way.

And for some fans, that’s already enough.