Overview
- Early this month Microsoft confirmed a wide Xbox restructuring that includes roughly 1,600 initial job cuts and the divestment of several first‑party teams, which prompted reassignment and layoffs across studios.
- Bloomberg reported that Obsidian cancelled multiple internal projects, including a planned sequel to 2025’s Avowed, as the studio was ordered to reprioritize work toward a new Fallout title.
- Reporter Jason Schreier and several follow‑ups say a very small skeleton crew is still working on Avowed 2 in the hope of finishing enough pre‑production to re‑pitch the game to Xbox if capacity allows.
- Reporting identifies Josh Sawyer as the reported lead on Obsidian’s new Fallout effort, while Obsidian figures such as Chris Avellone and director Brandon Adler have posted that the studio’s creative core remains intact.
- The changes have cut roughly a quarter of Obsidian’s staff in California, lowered morale among remaining employees, and signal a broader Xbox strategy shift away from diverse new IP toward faster delivery of tentpole franchises.