Romero’s Shooter Canceled After Xbox Layoffs—But the Studio’s Not Giving Up Yet

John Romero’s return to the first-person shooter spotlight has hit a wall. His studio, Romero Games, was working on an ambitious FPS with a new IP and Unreal Engine 5, backed by Microsoft. But after a wave of Xbox layoffs, that funding is gone, and the future of the project is uncertain.

We recently mentioned John and his legacy in a post about how he played Dusk, a game inspired by the early DOOM titles, and gave it his blessing — something that, of course, made its developer incredibly happy.

According to multiple reports and confirmation from Romero Games itself, the game was canceled due to Microsoft’s cost-cutting in its gaming division. Around 4% of Microsoft’s global workforce, roughly 9,000 people, were laid off at the start of July 2025. Gaming was hit hard. Several Xbox projects were reportedly scrapped, including high-profile games like Perfect Dark and Everwild. Now, Romero’s title joins that list.

On Bluesky, Romero Games revealed that its publishing partner had pulled funding after the layoffs. That left the studio without the resources to continue development. At the time, one employee said the studio had closed entirely. Irish outlet The Journal reported that 42 staffers, along with a wider group of over 100 contributors, were let go or left without work.

"We’re trying to find other ways of funding the project," a team member said. "But for now, it’s completely closed, and the studio is closed."

However, that wasn’t the end of the story. On July 7, Romero Games posted a follow-up message saying the studio was still fighting to stay alive. According to the tweet, they had been approached by “several publishers” and were now weighing their options.

"Romero Games is not closed, and we are doing everything in our power to ensure that it does not come to that," the studio wrote.

"We've been contacted by several publishers interested in helping us bring the game across the finish line, and we're currently evaluating those opportunities."

This update came after days of speculation around whether the team would survive at all. The now-canceled shooter had been in development since at least 2022, when Romero first teased it to the public. At the time, he said it would feature an all-new game world, original characters, and cutting-edge visuals. It was supposed to be his first major FPS since Daikatana, and his return to building large-scale shooters after years of smaller projects.

Romero is best known for co-creating Doom, Quake, and Wolfenstein 3D. But more recently, his output has been low-profile. In 2019, he released SIGIL, a custom Doom level pack. Before that, he tried to crowdfund Blackroom, another FPS, but the Kickstarter campaign was pulled. This new project was seen by many as his next real chance to make a major splash.

According to Romero Games’ website, the studio includes developers with credits on Far Cry, Crysis, Tom Clancy's The Division, and Watch Dogs. The team has shipped over 200 titles between them, with awards from BAFTA and other major groups. They also say the new shooter hit every milestone and passed every internal test before funding was cut.

"We hit every milestone on time, every time, consistently received high praise, and easily passed all our internal gates," the studio stated.

"We are incredibly proud of the work being done, and of the talented team behind it. The best we've worked with."

Speaking of DOOM, the classic 1993 game is getting a 2025 release on the SNES platform. An undying classic, indeed.

The cancellation is part of a broader wave of trouble in the gaming industry. Microsoft’s mass layoffs this year have led to the shelving of several high-budget projects. According to Xbox head Phil Spencer, the cuts were designed to “increase agility and effectiveness” across the business. Internal memos have confirmed a reduction in management layers and the shifting of resources to fewer projects.

Still, the loss of a Romero-led FPS hurts Xbox's already shaky momentum. After weaker-than-expected sales on games like Redfall and Starfield, and with Game Pass subscriber growth slowing, Microsoft is under pressure to justify its studio acquisitions and aggressive content strategy. Canceling projects like Romero’s doesn’t help that image, especially when many fans were waiting for a new hit shooter.

While there’s still hope Romero’s game will find a new home, it will take time. These kinds of publisher negotiations don’t happen overnight. The fact that the game was relatively far along helps. So does Romero’s name recognition. But the studio still needs a company willing to step in and cover the costs to finish development, QA, and launch.

For now, Romero fans will have to wait and see. The FPS was never given a title or public footage, but expectations were high. If a publisher picks it up soon, Romero Games could bounce back before year’s end.