Obsidian Reportedly Still Working on Avowed 2 After Cancellation

Microsoft’s Xbox division is undergoing a major corporate restructuring, with CEO Asha Sharma announcing 3,200 layoffs across multiple studios. The reset, justified by citing lower profit margins compared to competitors, represents a significant strategic pivot away from the studio’s recent focus on award-winning, culturally relevant games.

The restructuring includes the cancellation of sequels like Avowed 2, developed by Obsidian Entertainment. However, reports suggest the team working on Avowed 2 is continuing their efforts unofficially, hoping the project may eventually be revived despite the official cancellation.

As part of the reset, Xbox is redirecting resources toward established franchises with proven player appeal, particularly Halo and Fallout. This shift has drawn criticism from industry observers who argue it could lead to “Marvel-style blandness and oversaturation” rather than promoting innovation and artistic vision.

Integral to the restructuring is Matthew Ball, a prominent games analyst known for his influential “State of Video Gaming” presentations, who has been hired as Xbox’s chief strategy officer. Ball, who advocates for metaverse integration in gaming, was brought on to implement the company’s new strategic direction.

The layoffs have sparked resistance from affected workers. Bethesda Game Studios staff, who are organized through the CWA union, are planning protest rallies against the cuts. Gaming modders have shown solidarity with laid-off developers, incorporating union symbols into popular mods as a form of digital protest.

Obsidian Reportedly Still Working on Avowed 2 After Cancellation

Sources