Obsidian Shifts Focus from Avowed to Fallout in Xbox’s Strategic Reset

In the wake of Microsoft’s significant Xbox overhaul, which includes the layoff of 3,200 employees, the closure of certain studios, and a strategic pivot towards “higher priority projects,” Obsidian Entertainment is shifting its focus. Known for titles like Grounded and The Outer Worlds, the studio is now embarking on a new Fallout game while canceling several other projects, including a sequel to last year’s Avowed.

Despite the popularity of the Fallout TV series, which is set for a third season, Xbox hasn’t launched a new game in the franchise since 2018’s Fallout 76. Josh Sawyer, Obsidian’s studio design director, will lead the development of the new Fallout title. Sawyer, who previously directed 2022’s Pentiment and Fallout: New Vegas, had been working on an RPG that shared structural and thematic elements with Fallout but was not part of the series.

Regarding the Avowed sequel, reports indicate that development was progressing well and an announcement was expected within the next year. Obsidian remains committed to continuing work on the early access title Grounded 2 and additional content for The Outer Worlds 2.