Obsidian Shifts to New Fallout Game After Xbox Layoffs

Obsidian Entertainment, the acclaimed RPG developer, is pivoting to develop a new Fallout game under the direction of Josh Sawyer, the creative force behind the beloved 2010 title Fallout: New Vegas. This strategic shift, reported by multiple outlets, follows significant layoffs and project cancellations at the studio as part of a broader restructuring within Microsoft's Xbox division.

The move comes after a wave of layoffs earlier this week that affected approximately a quarter of Obsidian's workforce, a reduction of roughly 50 to 70 employees across various disciplines. As part of this corporate reset, multiple planned projects have been canceled to prioritize development on the Fallout title. Most notably, a sequel to the 2025 action RPG Avowed has been shelved despite reportedly progressing smoothly toward a planned announcement next year.

The decision aligns with the stated strategy of Xbox CEO Asha Sharma to focus investment on the company's largest and most established franchises. With Bethesda Game Studios, the primary steward of the Fallout intellectual property, currently focused on The Elder Scrolls VI, the assignment to Obsidian is seen as a way to accelerate...