The gaming world just got rocked by a massive, bittersweet bombshell. According to a shocking report from Bloomberg’s Jason Schreier, Xbox is executing a massive corporate restructuring that has completely upended the pipeline at Obsidian Entertainment.
The headline news that has fans buzzing is massive: Obsidian is officially beginning work on a brand-new Fallout game. Even better? Industry legend Josh Sawyer—the mastermind behind Fallout: New Vegas and Pillars of Eternity—is officially steering the ship. Schreier noted that Sawyer had actually been directing an unannounced original RPG that was “structurally and thematically” similar to Fallout, but Xbox has now cleared the deck to let him work on the real deal.
Unfortunately, this thrilling news comes with a heavy dose of collateral damage.
The Casualties of Corporate Strategy
To make room for this massive nuclear pivot, Xbox’s new CEO Asha Sharma is shaking things up, and several major projects have been completely canceled.
- Avowed 2 is officially dead: A planned sequel to the fantasy RPG Avowed was reportedly progressing incredibly well behind the scenes and was on track for a formal announcement within the next year. It has been abruptly canceled because it didn’t align with the new corporate vision. A tiny skeleton crew is keeping the project on a microscopic slow burn just in case it can be revived down the line, but for all intents and purposes, development has halted.
- Devastating Layoffs: This massive pipeline shift isn’t just about shifting pixels; it has a human cost. The restructuring hit the studio with brutal layoffs, with Obsidian losing roughly 25% of its workforce (amounting to over 50 employees let go) as part of wider, sweeping cuts across Xbox.
While Obsidian will continue pushing forward with its existing commitments—like story DLC for The Outer Worlds 2 and the early access development of Grounded 2—the main development engine is being radically re-tooled for the wasteland.
It is a wildly conflicted moment for RPG fans. On one hand, the dream of Josh Sawyer returning to the Fallout universe is the ultimate scenario that gamers have been begging for since 2010. On the other hand, losing a quarter of the studio’s incredibly talented developers and throwing away a highly anticipated sequel makes this a stark reminder of the harsh corporate realities of the modern gaming industry.
