Obsidian Entertainment is reportedly changing direction under Xbox.
According to a new Bloomberg report, the studio is moving toward development on a new Fallout game, while a planned sequel to Avowed has been canceled.
TL;DR – Key Info
- Obsidian is reportedly starting work on a new Fallout game.
- The project is said to be led by Josh Sawyer, director of Fallout: New Vegas.
- A planned Avowed sequel has reportedly been canceled.
- Bloomberg reports that the Avowed sequel was progressing well and could have been revealed within the next year.
- The decision is reportedly part of Xbox’s wider studio reset and investment shift.
- Obsidian has also reportedly been hit by layoffs and other project cancellations.
Table of Contents
What happened?
Obsidian Entertainment is reportedly being redirected toward a new project in the Fallout franchise. The report comes from Bloomberg’s Jason Schreier and has since been covered by multiple outlets.
Avowed
Release Date: February 18, 2025
Genres: Role-playing (RPG), Adventure
As part of that shift, Xbox has reportedly canceled a sequel to Avowed. The decision appears to be connected to Microsoft’s wider Xbox restructuring, which is moving investment toward higher-priority franchises and projects.
Worth Knowing: Microsoft and Obsidian have not officially announced the new Fallout game yet, so the project should still be treated as reported, not formally revealed.
Obsidian’s new Fallout game
The most important part of the report is that Obsidian will reportedly begin work on a new Fallout title. Josh Sawyer is said to be leading the project, which immediately makes the news notable for longtime Fallout fans.
Sawyer previously directed Fallout: New Vegas, the 2010 RPG developed by Obsidian and published by Bethesda. New Vegas remains one of the most beloved entries in the series, especially among players who value branching quests, faction writing, and role-playing freedom.
Fallout: New Vegas Ultimate Edition
Release Date: October 21, 2010
Genres: Role-playing (RPG), Shooter
Details about the new Fallout game are not known yet. It has not been confirmed whether it is connected to New Vegas, set in a new location, or designed as a full mainline-style RPG.
| Topic | Current Status |
|---|---|
| New Fallout by Obsidian | Reported by Bloomberg, not officially announced yet. |
| Project lead | Josh Sawyer is reportedly leading development. |
| Release date | Not announced. |
| Setting | Unknown. |
What happened to Avowed 2?
The planned Avowed sequel has reportedly been canceled. According to Bloomberg’s reporting, development was going well and the game was on track to be announced within the next year.
That makes the cancellation especially surprising. Rather than being scrapped because of poor progress, the project appears to have been cut because it did not fit Xbox’s new studio strategy.
The key point: Avowed 2 was reportedly not canceled because it was failing. It was reportedly canceled because Xbox is changing what it wants Obsidian to prioritize.
How this fits Xbox’s reset
The move comes during a wider Xbox restructuring. Microsoft has been cutting jobs, canceling projects, and reallocating development resources toward franchises it considers higher priority.
For Obsidian, that reportedly means Fallout becomes the main focus, while multiple other projects have been canceled. Reports also say the studio has seen a significant staff reduction as part of the wider changes.
Why Fallout? It is one of Microsoft’s biggest RPG franchises, and demand for a new single-player Fallout game remains high.
Why Obsidian? The studio already has Fallout history thanks to Fallout: New Vegas.
Why now? Xbox appears to be concentrating resources on proven franchises during its reset.
What this means for players
For Fallout fans, the report is huge. Obsidian returning to the franchise with Josh Sawyer involved is exactly the kind of news many players have wanted since Fallout: New Vegas.
For Avowed fans, the news is much rougher. A sequel was reportedly moving forward, but Xbox’s new priorities have ended that path for now. The original Avowed may still stand on its own, but its future as a series is suddenly uncertain.
Obsidian may be returning to Fallout, but the cost appears to be Avowed’s future. Until Xbox officially announces the project, though, the new Fallout game remains a major reported shift rather than a confirmed reveal.