Bethesda says that Obsidian’s ‘creative identity’ will be preserved, just months after multiple projects were cancelled and it was told to make a Fallout game

Obsidian Entertainment has been reorganized under Bethesda as part of a major Xbox studio restructuring. The studio will now report to Bethesda leadership rather than Xbox Game Studios, though the change is being framed as a reporting structure adjustment rather than a fundamental operational change.

Bethesda president Jill Braff stated in an internal memo that “the creative identity and strengths that make Obsidian distinct will remain at the core of their studio and work.” Feargus Urquhart and Obsidian’s existing leadership team will continue to run the studio, and the publisher has emphasized there will be no “roadmap reset.”

The reorganization comes amid a significant Xbox restructuring that resulted in layoffs across multiple studios. Obsidian is currently developing a new Fallout game in collaboration with Bethesda Game Studios, which continues to lead the franchise.

However, the reassurances about Obsidian’s creative freedom come just months after the studio had multiple projects cancelled. While Bethesda frames the change as preserving Obsidian’s distinct identity, the studio is now positioned specifically to work on the Fallout franchise—a constraint that contrasts with its previous freedom to pursue original projects like Avowed and The Outer Worlds.

The move consolidates RPG development under Bethesda’s umbrella, with ZeniMax Media (Bethesda’s parent company) overseeing the arrangement as part of Microsoft’s broader 2021 acquisition of ZeniMax for $7.5 billion.

Bethesda says that Obsidian’s ‘creative identity’ will be preserved, just months after multiple projects were cancelled and it was told to make a Fallout game

Sources