Obsidian shifts to Fallout as Xbox cuts reshape its slate
Bloomberg says the Microsoft-owned studio canceled several projects, including an Avowed sequel, while beginning work on a new Fallout game.
By Hana Yoshida · Markets Reporter
2 min read
Obsidian Entertainment is changing its development plans as Microsoft reshapes its Xbox business, with a new Fallout game now taking priority, according to Bloomberg. The move matters because it redirects one of Microsoft’s best-known role-playing game studios toward a franchise that has not had a new Xbox release since Fallout 76 in 2018, The Verge reported.
Bloomberg reported that Obsidian has started work on a new Fallout title and canceled several other projects. Those cancellations include a planned sequel to Avowed, the fantasy role-playing game released last year, according to Bloomberg.
The changes come during a broader Xbox restructuring. The Verge reported that Microsoft’s plan includes layoffs affecting 3,200 workers, studio divestitures or closures, and a shift in spending toward projects Microsoft considers higher priority.
Fallout moves up the list
Bloomberg reported that Josh Sawyer, Obsidian’s studio design director, is leading the new Fallout project. Sawyer previously directed Fallout: New Vegas and the 2022 game Pentiment, according to The Verge.
Bloomberg said Sawyer had been directing another role-playing game that resembled Fallout in structure and themes but was not part of the Fallout franchise. Under the new plan, Obsidian’s work is being redirected toward an official Fallout game, Bloomberg reported.
The franchise has received fresh attention outside games. The Verge reported that Amazon’s Fallout television series has been successful and is set to receive a third season. Microsoft’s Xbox division, however, has not released a new Fallout game since Fallout 76, which came out in 2018, according to The Verge.
Avowed sequel dropped
The canceled Avowed follow-up had been progressing and could have been announced within the next year, Bloomberg reported. The decision to cancel it shows how Microsoft’s Xbox changes are affecting projects even when development is not described as troubled.
Obsidian is still expected to continue some existing work. Bloomberg reported that the studio plans to keep developing Grounded 2, which is in early access, and downloadable content for The Outer Worlds 2.
Obsidian is known for games including Grounded and The Outer Worlds, The Verge reported. The studio became part of Microsoft’s gaming operation before the current round of Xbox cuts.
Layoffs hit the studio
Kotaku reported that Microsoft laid off about 25 percent of Obsidian’s staff this week. The cuts are part of the wider Xbox reductions reported by The Verge and other outlets.
Xbox spokesperson Delaney Simmons declined to comment, according to The Verge. Microsoft has not announced the new Fallout game publicly, and Bloomberg’s report did not include a release window.
This story draws on original reporting from The Verge.