Obsidian Entertainment's Fallout future after layoffs
Intelligence Summary
- Obsidian Entertainment is undergoing major changes after layoffs and a renewed focus on a new Fallout game.
In brief
- Around 25% of Obsidian Entertainment's staff has been laid off, putting the studio under pressure.
- The Avowed sequel has been cancelled, raising questions about the studio's future.
- Strong rumors suggest Obsidian is working on a new Fallout game, led by Josh Sawyer.
What happened?
Obsidian Entertainment, known for titles such as Fallout: New Vegas and The Outer Worlds, has recently gone through a major reorganization. Around 60 to 70 employees, roughly 25% of the studio's total staff, were laid off as part of a broader restructuring within Xbox. This has led to the cancellation of the Avowed sequel, a major disappointment for fans who were looking forward to a follow-up to the fantasy RPG.
Why this matters
The impact of these layoffs is far-reaching. For players, this means not only uncertainty about future releases, but also the possibility that development on existing projects could be delayed. Losing experienced staff can affect the creativity and quality of future titles. Given Obsidian's recent history of both successful and risky projects, this shift makes the studio's future look uncertain.
GAME-scanner analysis
The cancellation of the Avowed sequel has been confirmed by multiple reliable sources, including Bloomberg. The rumors about a new Fallout game, reportedly led by Josh Sawyer, also appear credible. Sawyer previously found success with Fallout: New Vegas, which raises expectations for a new project. However, without official confirmation from Obsidian about the details of these new projects, some caution is warranted when drawing conclusions. A focus on Fallout could bring both opportunities and risks, depending on how the studio restructures itself.
What does this mean for players?
For players, the main question is how these changes will affect the development of future games. The cancellation of the Avowed sequel could shift the studio's focus toward other projects, such as the new Fallout game. That could bring both opportunities and risks, depending on how Obsidian reorganizes and what priorities it sets. Players should prepare for a potentially longer wait for new releases and an uncertain future for one of their favorite studios.
Timeline
2026-07-08: Obsidian Entertainment loses around 25% of its staff due to layoffs at Xbox.
2026: The Avowed sequel is cancelled, raising questions about the studio's future.
2026: Rumors emerge about a new Fallout game led by Josh Sawyer.