Xbox has put The Elder Scrolls 6 in jeopardy, devs working on RPG say

Published Jul 9, 2026, 12:03 PM EDT

Bethesda Softworks, like many Xbox studios, suffered a massive restructuring in July that put swaths of people out of work. The Bethesda segments reportedly most affected by these layoffs were the teams working on games like The Elder Scrolls Online and Fallout 76 — but some people working on The Elder Scrolls 6 were let go as well.

Layoffs are never good for morale. Morale also isn't helped by the knowledge that Xbox plans to cut an additional 1,600 employees in the gaming division before the end of its current fiscal year.

In the wake of the layoffs, tension hangs in the air. Employees posted remembrance displays on social media of laid-off workers adorned with small tokens of gratitude, like flowers. These displays, which were placed in the Bethesda office common areas, were quickly pulled down at the behest of management.

The layoffs also have a direct impact on The Elder Scrolls 6's development. The Bethesda Game Studios team that has worked on core games like Skyrim has historically been smaller in comparison to other big-budget franchises. It's unclear how many TES6 developers were let go, but between the already small team size — and the game's extended development timeline — any cuts at all were bound to have an impact. There are fewer people working on the game, yes, but more critically, layoffs often mean losing institutional knowledge and experience that made it possible to work with small teams.

Speaking to IGN under the condition of anonymity, one Bethesda employee said, "There is a fear that we are going to be replaced by cheaper, contracted labor, or we will hire folks to replace them that will need to be onboarded (our tools are proprietary, other devs aren't going to know how they work) resulting in more delays, and we'll need to crunch to make up the time."

The Elder Scrolls 6 is being developed with Bethesda's proprietary Creation Engine 3, the same toolset that the studio used to develop Starfield.

Another concerned Bethesda worker told IGN that the cuts have left the remaining team "worried about this delaying the game." While no release date has officially been set, we know that Xbox's new strategy is to focus on its major gaming brands. That includes both The Elder Scrolls 6 and a reported new Fallout game made by Obsidian Entertainment. Added pressure and fewer people working on the game increase the likelihood of long crunch hours. At the very least, needing to train more people does not bode well for TES6's development timeline.

Xbox is reportedly mitigating these issues by moving staff from teams working on The Elder Scrolls Online to The Elder Scrolls 6 team. Still, according to IGN's report, Xbox has apparently "decimated" Bethesda's quality assurance department. Starfield aside, the studio is notorious for its buggy releases.

Even with contractors and repurposed internal staff, the layoffs will be a huge blow to Bethesda and its fans. Some of the most iconic elements associated with Skyrim, like the title's key art and the infamous character who greets players at the start of the game, were both conceptualized by laid-off workers.