Microsoft’s big Xbox “reset” is reshaping Obsidian Entertainment. The studio behind Grounded and The Outer Worlds is now starting work on a new Fallout title. Multiple projects got canceled — including a sequel to last year’s Avowed.
The news comes from Bloomberg. The reset includes layoffs affecting 3,200 staff, studio closures, and a shift in investment toward “higher priority projects.”
Josh Sawyer — Obsidian’s studio design director and the director of Fallout: New Vegas — will lead the new Fallout game. Sawyer had been working on an RPG “similar structurally and thematically to Fallout but was not part of the franchise,” according to Bloomberg.
Xbox hasn’t released a new Fallout game since Fallout 76 in 2018. The TV show has been a massive success — it’s getting a third season — so the timing makes sense.
As for the canceled Avowed sequel, Bloomberg reports development was “going well” and would have been announced within the next year. That’s presumably not happening now.
Obsidian still plans to work on Grounded 2 (currently in early access) and DLC for The Outer Worlds 2. About 25% of Obsidian’s staff was laid off this week, per Kotaku.
Xbox spokesperson Delaney Simmons declined to comment.
