Overview
- Bloomberg reports Obsidian has been reassigned to begin work on a new Fallout game with studio design director Josh Sawyer reportedly leading the project, though sources say the plan remains in flux.
- A California WARN notice reported by Game File lists 52 layoffs at Obsidian this week, which multiple outlets say represents about a quarter of the studio’s workforce.
- Xbox has cancelled several unannounced Obsidian projects, including a planned sequel to 2025’s Avowed, while a small team may continue limited work on the follow-up in hope of reviving it later.
- Obsidian will still support live projects such as downloadable content for The Outer Worlds 2 and development on Grounded 2 even as staff are redeployed to the Fallout effort.
- The studio changes are part of Xbox CEO Asha Sharma’s broader reset to prioritize tentpole franchises for better Game Pass economics, a move that may prompt more divestitures, reassignments, and further cuts across Xbox studios.