Microsoft Pivots Obsidian Entertainment to New Fallout Game, Cancels Avowed Sequel
As part of Microsoft's significant Xbox "reset" strategy, Obsidian Entertainment is shifting its focus to develop a new Fallout game. The studio, known for titles like Grounded and The Outer Worlds, has canceled multiple projects including a sequel to last year's Avowed, according to reporting by Bloomberg.
The restructuring comes alongside layoffs affecting approximately 3,200 employees and the jettisoning of several studios, as Microsoft shifts investments toward "higher priority projects." Josh Sawyer, Obsidian's studio design director, will lead the new Fallout initiative.
The pivot follows the success of Amazon's Fallout TV series, which has been renewed for a third season. Notably, Xbox hasn't released a new game in the franchise since 2018's Fallout 76, despite the IP's renewed popularity following the television adaptation.