Microsoft's Xbox Reset Leads Obsidian to Cancel Avowed Sequel, Start New Fallout Game
As part of a major Xbox strategy shift involving 3,200 layoffs, studio closures, and resource reallocation, Obsidian Entertainment has cancelled multiple projects including the Avowed sequel and is starting work on a new Fallout title led by Josh Sawyer, director of Fallout: New Vegas.
Microsoft is continuing its sweeping Xbox strategy overhaul, which has already resulted in 3,200 layoffs and the shutdown of several studios. These changes have now impacted Obsidian Entertainment, the developer behind Grounded and The Outer Worlds.
According to Bloomberg, Obsidian has cancelled multiple projects, including the sequel to last year's Avowed, which was reportedly progressing well and would have been announced within the next year. Instead, the studio is beginning work on a new Fallout game, to be led by Josh Sawyer, Obsidian's studio design director and the director of Fallout: New Vegas and Pentiment. Sawyer had previously been directing an RPG that was structurally and thematically similar to Fallout but was not part of the franchise.
Despite the success of the Fallout TV show, which has been renewed for a third season, Xbox has not released a new game in the series since Fallout 76 in 2018. Obsidian still plans to continue work on the early access title Grounded 2 and DLC for The Outer Worlds 2.
An Xbox spokesperson, Delaney Simmons, declined to comment. According to Kotaku, about 25% of Obsidian's staff were laid off this week.
These changes are part of Microsoft's effort to focus on "higher priority projects," resulting in significant shifts in the studio's portfolio and workforce.
