Obsidian Entertainment is reportedly pivoting back to the Fallout franchise and hitting pause on a sequel to Avowed.
The mass layoffs at Xbox have been catastrophic. Ninja Theory, Undead Labs, Double Fine, and Compulsion Games are all either going independent, or being acquired by other parties. Arkane Studios’ fate remains up in the air as it continues negotiating with Microsoft. Both Zenimax Online Studios and id Software have apparently been gutted. While we’re still waiting to hear more terrible news from these layoffs, it also appears that future plans are being set in place.
As Xbox CEO Asha Sharma and her team attempt to pivot their remaining studios to Xbox, Bethesda, and Activision Blizzard’s biggest IP, many have been left wondering who is left to make the games. Now, it appears that a familiar studio may be returning to Fallout.
Welcome Back to the Wasteland
According to Bloomberg’s Jason Schreier, Irvine-based Obsidian Entertainment has canceled multiple projects to begin working on a new game in the Fallout franchise. One of those canceled projects is a sequel to Avowed, which Schreier reports was doing quite well and on track for an announcement in 2027. However, the game apparently didn’t fit into Sharma’s plan of focusing on tentpole franchises and has been shelved.
Studio design director Josh Sawyer has been tapped to lead development of this new Fallout game. He was working on a new RPG that was similar to Fallout, but not a Fallout title. No word yet if this new title will build upon the game Sawyer was working on, a New Vegas 2, or something entirely new.
Fallout fans will be happy to hear about this news. Obsidian Entertainment, while an established developer, gained widespread claim for Fallout: New Vegas. The 2010 game remains beloved to this day, and fans have long clamored for Obsidian to return to the franchise and deliver a sequel. Since New Vegas, the studio has worked on South Park: The Stick of Truth, Pillars of Eternity, The Outer Worlds, Pentiment, Grounded, and Avowed. Unfortunately, despite the pivot, Obsidian Entertainment had to layoff 25% of its staff.
A Reset with No Clear Direction
Obsidian’s pivot to Fallout and the greater Xbox layoffs are all a part of Sharma’s “reset” of Xbox, though where she intends to take the brand remains as clear as mud. Sharma wants more tentpole games out faster, yet opted to cut 3200 jobs and divest five studios rather than putting them to work. She wants 1 billion daily eyes on Xbox, yet she’s taking games off PlayStation 5 and Nintendo Switch 2. The biggest tentpoles are games like Call of Duty, The Elder Scrolls, and Fallout, all historically multiplatform franchises that only reach the numbers they do because of PlayStation and Nintendo.
One of those canceled projects is a sequel to Avowed, which Schreier reports was doing quite well and on track for an announcement in 2027. However, the game apparently didn’t fit into Sharma’s plan of focusing on tentpole franchises and has been shelved.
Many of these questions will need to be answered before Xbox enters the next-generation. At less than 35 million units sold, Xbox Series X|S is being crushed by PS5 3-to-1. Given the momentum of the Nintendo Switch 2, it won’t be long before Xbox Series X|S is back in a distant third place. While console exclusives were and, in some cases are, a powerful driving force of consoles, many of Xbox’s largest owned IP are no longer the juggernauts they once were. Compared to God of War, Marvel’s Spider-Man, Super Mario, and The Legend of Zelda, neither Halo nor Gears of War can really compete.
Of course, take all this with a grain of salt. While Jason Schreier’s track record is impeccable, nothing is truly official until Obsidian Entertainment, Bethesda Softworks, or Xbox make an official announcement.
