Fallout: New Vegas studio Obsidian reportedly moved onto a new Fallout game by Xbox, but at the cost of a sequel to Avowed
Microsoft’s sweeping Xbox reset resulted in 3,200 job cuts globally, with Obsidian Entertainment taking significant losses as part of the first wave. The studio lost approximately 25% of its workforce, with a WARN notice confirming at least 52 layoffs across California and remote U.S. positions.
As part of Xbox’s strategic realignment to focus exclusively on its largest franchises, Obsidian has been redirected away from current projects to develop a new Fallout game. This represents a shift in the studio’s direction and aligns with Microsoft’s stated goal of concentrating resources on flagship intellectual properties.
The consequence of this pivot is the cancellation of multiple Obsidian projects, most notably a sequel to Avowed, the studio’s 2025 fantasy RPG. While the exact scope and timeline of the new Fallout project remain unclear, the decision underscores the broader upheaval within Xbox’s development divisions. Other affected studios include id Software, which also experienced significant cuts. The new Fallout game is described as an original title rather than a remaster or remake, though limited details are available about its scope or release timeline.