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Obsidian Entertainment 23 Sept 2026, 17:01

Obsidian Entertainment under Bethesda after Xbox restructuring on 22 September 2026

Obsidian Entertainment under Bethesda after Xbox restructuring on 22 September 2026

Microsoft placed Obsidian Entertainment under Bethesda on 22 September 2026 as part of a broader Xbox restructuring.

  • Bethesda president Jill Braff reportedly told staff that Obsidian would keep its creative identity and that Feargus Urquhart would remain with the existing leadership team.
  • Bethesda Game Studios will continue to lead the Fallout franchise, while Obsidian is working on a new Fallout project.

What happened

Microsoft placed Obsidian Entertainment under Bethesda on 22 September 2026, according to multiple reports about an internal Xbox restructuring. The change concerns the reporting line within Microsoft Gaming, not a new acquisition or a public announcement of a studio sale. Eurogamer reported on 23 September 2026 that the move was part of a broader reorganization within Xbox, with Obsidian now falling under Bethesda in the internal structure.

According to a message to staff seen by Aftermath, Bethesda president Jill Braff said Obsidian would retain its creative identity and strengths. Feargus Urquhart and the current leadership team would also remain in place, while Obsidian would now report to Braff. Later reporting on 25 September 2026 reiterated that line, with Braff reportedly stressing that the studio is not being shut down or turned into an anonymous support division.

The same reporting says Bethesda Game Studios will continue to oversee the Fallout franchise. At the same time, Obsidian is said to be working with Bethesda Game Studios on a new Fallout project, although it has not been confirmed whether that is a sequel, spin-off, or another type of game. The sources note that Obsidian previously handled Fallout: New Vegas, which is why the studio is once again being linked directly to the franchise.

The restructuring is part of a wider series of changes at Xbox and Microsoft Gaming. Earlier this year, the sources say 1,600 employees were laid off, five first-party developers left, and a later round reportedly cut another 268 roles. The provided context also notes that the exact scope of the restructuring varies by source, but the main thread is the same: Microsoft is reshaping the internal management of multiple studios and projects.

Timeline

  • 22 September 2026: Reports say Obsidian Entertainment was placed under Bethesda as part of Microsoft’s Xbox restructuring.

  • 22 September 2026: The same reporting says Obsidian is working on a new Fallout project with Bethesda Game Studios.

  • 22 September 2026: Additional reporting says Bethesda president Jill Braff informed staff that Obsidian would keep its identity and leadership.

  • 23 September 2026: Eurogamer publishes a report describing Obsidian’s move under Bethesda as part of the wider Xbox reorganization.

  • 25 September 2026: Game Rant follows up with a report on Bethesda’s response and confirmation that Obsidian retains its creative identity.

  • Earlier this year: Xbox reportedly laid off 1,600 workers and lost five first-party developers.

  • Later this year: An additional layoff round reportedly affected another 268 roles within Microsoft’s gaming division.

  • 2026: The sources say Obsidian is already working on a new Fallout project, while Bethesda Game Studios continues to lead the franchise.

Background

Obsidian Entertainment is the studio behind Fallout: New Vegas, The Outer Worlds, Avowed, and Grounded. The current reporting links the studio back to Bethesda during a period in which Microsoft is reshuffling its internal game structure. The sources place that reshuffle within Microsoft Gaming and Xbox Game Studios, with reporting lines for several teams being adjusted without any public sale or merger.

The Fallout franchise remains with Bethesda Game Studios, according to the reports. That matters because Obsidian previously worked with Bethesda on Fallout: New Vegas and is now said to be working on a new Fallout project again. The provided context explicitly says the exact form of that project has not been confirmed, so there is no confirmation whether it is a mainline entry, spin-off, or another type of game.

The sources also emphasize that Obsidian is not being separated from its existing leadership. Feargus Urquhart and the current leadership team are said to remain in place, while the studio comes under the responsibility of Jill Braff. That detail matters because it suggests Microsoft is moving the studio organizationally, but not publicly replacing its creative direction or management.

The broader Xbox restructuring context is also relevant. The provided sources refer to multiple layoff rounds and studio changes within Microsoft Gaming, with the exact numbers and timing varying by publication. The context mentions 1,600 layoffs, another 268 roles later on, and the departure of five first-party developers. The sources do agree that the restructuring is extensive and that Obsidian is getting a new place within it.

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Sources