Microsoft cancels Avowed sequel; Obsidian shifts focus to new Fallout game
Microsoft is restructuring Obsidian Entertainment, cancelling multiple projects including a sequel to Avowed, and directing the studio to develop a new Fallout game. Layoffs are also underway, with Obsidian cutting about a quarter of its workforce.
According to Bloomberg, Microsoft continues to reshape its gaming division, and this time the changes affect Obsidian Entertainment, the studio behind titles like Fallout: New Vegas, The Outer Worlds, and Pillars of Eternity. Several of the studio's projects have been cancelled, including a planned sequel to Avowed. Instead, Obsidian will now focus on developing a new Fallout game.
The new Fallout game is reportedly being led by Josh Sawyer, director of Fallout: New Vegas and Pentiment. This shift comes as Microsoft aims to concentrate its studios on successful franchises such as The Elder Scrolls, Doom, Wolfenstein, and Fallout. Launching a new Fallout title is particularly timely given that the most recent core game in the series, Fallout 76, was released in 2018, and the franchise has gained renewed popularity through its Amazon Prime Video series.
Workforce reductions
The studio's redirection is accompanied by layoffs. Bloomberg reports that Obsidian is letting go of approximately a quarter of its staff. According to WARN notices, 52 employees will be laid off: 43 from the Irvine, California office, and nine in-state remote workers. Sister Xbox studio id Software, known for the Doom series, is reportedly laying off about half of its workforce—more than 90 employees. Outside the gaming division, Microsoft is also eliminating another 3,200 jobs.
Background
Microsoft acquired Obsidian Entertainment in 2018, a few years before its massive purchase of Activision Blizzard King in 2022. The ongoing layoffs and studio reshuffling are part of new Xbox CEO Asha Sharma's efforts to address Microsoft's troubled gaming business, though mass layoffs seem counterproductive to creating good games, notes Bloomberg.
