Obsidian Entertainment’s focus as a studio is being shifted by Xbox.
In a new report from Bloomberg’s Jason Schreier, the California studio “will begin working on a new game in the popular Fallout franchise”. With a new Fallout game now being the focus, Xbox has also canceled the planned sequel to Avowed.
A New Direction For Obsidian
With a focus on Fallout, Josh Sawyer will lead the development of the new game. What this game will be in the universe, however, is currently unknown.
“Previously, Sawyer had been directing a roleplaying game that was similar structurally and thematically to Fallout but was not part of the franchise,” Schreier writes.
This won’t be the first time Obsidian as a studio has worked on Fallout. Fallout: New Vegas, which was released in 2010, was developed by the studio with Bethesda serving as publisher. Sawyer was also the director of that title.
Avowed Was Progressing
As mentioned, with this new focus comes the decision to cancel the in-development Avowed sequel. According to Schreier, the game’s development was “going well” and was “on track to be announced within the next year”. Despite this, however, it wasn’t ultimately a part of Xbox CEO Asha Sharma’s plan for Xbox’s studios.
Xbox declined Insider Gaming’s request for comment.
Earlier this week, Xbox announced its largest single layoff in the company’s history. On July 6, 1,600 people were let go, while another 1,600 will be let go throughout the rest of the fiscal year. Obsidian wasn’t left unscathed, as at least 52 people have been let go from the studio.
What do you think of Obsidian developing a new Fallout game? Leave your thoughts in the comments below, or join the discussion in the official Insider Gaming Discord.
In other news, read about Sony’s CEO selling over half of his stock in the company after the PlayStation disc announcement. And for even more Insider Gaming delivered directly to your inbox, sign up for our newsletter.




Avowed was trash. New Vegas 2 will be trash too Chris Avellone made that and would have saved TES too. Best bet would be remake New Vegas instead.
I wanted to see what they did with Avowed 2. Xbox will be shifting everyone to just big franchise sequels and have gotten rid of a high chunk of their more creative talent/studios. They won’t have time for original IP… it’s time for rinse and repeat!
I have yet to play Avowed but going off the numbers of players and sales(thanks to Game Pass) It’s no wonder XBOX has stopped development of Avowed 2 in-favor of Fallout New Vegas 2.
Asha has been talking about how much XBOX needs to go use more on their top IPs and Fallout happens to be one of them.
I wouldn’t be surprised if Obsidian’s Fallout is based around season 3 of the show
Obsidian should have been working on Fallout this whole time, they weren’t because Todd was upset people liked New Vegas (a distinctly not-Todd game) more than his fallout games. Sounds like Todd finally got overruled
This sound like 1 wrong choice after another. I think fallout kinda have explored what fallout is. Another Awoved that’s not foundationally made for online co-op would be interesting!