The planned sequel to the fantasy RPG Avowed has been canceled, and Obsidian Entertainment is redirecting resources toward a new Fallout game. The studio laid off 52 employees as part of the restructuring.
Obsidian Entertainment canceled the sequel to its fantasy RPG Avowed and laid off 52 employees, about 25% of its workforce, as part of a broader Xbox restructuring. Bloomberg reported that the Avowed sequel was progressing smoothly and an announcement was expected within a year. The studio is now shifting resources toward a new Fallout game, with Josh Sawyer, director of Fallout: New Vegas, expected to lead development. Bethesda Game Studios is slated to co-develop the project, though the plan is not yet finalized.
Following the layoffs and cancellations, Obsidian director Brandon Adler responded on LinkedIn to criticism that the studio had lost its identity. He acknowledged the layoffs were difficult but argued that many of the same people who worked on past titles like Fallout: New Vegas and Pillars of Eternity still hold key roles. He said the studio has changed over 20 years but its core creative spirit remains unchanged. The statement directly counters narratives that Obsidian has fundamentally changed after the restructuring.
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Obsidian Entertainment director Brandon Adler responded on LinkedIn to criticism that the studio has lost its identity after recent Xbox layoffs. He acknowledged the layoffs were difficult but argued that many of the same people who worked on past titles like Fallout: New Vegas and Pillars of Eternity still hold key roles. He said the studio has changed over 20 years but its core creative spirit remains unchanged.
Obsidian Entertainment has laid off 52 employees, about 25% of its workforce, as part of a broader Xbox restructuring. Multiple unannounced projects, including the sequel to the fantasy RPG Avowed, have been canceled. The studio is now redirecting resources toward a new game in the Fallout series, with Josh Sawyer, the director of Fallout: New Vegas, expected to lead development. Bethesda Game Studios is slated to co-develop the project, though the plan is not yet finalized. The layoffs and cancellations follow Microsoft's July 6 announcement of 4,800 company-wide cuts, with 1,600 in the Xbox division. Bloomberg reported that Avowed 2 was progressing smoothly and an announcement was expected within a year. The new strategy prioritizes major franchises, and the Fallout IP is considered a key asset. Other projects, such as downloadable content for The Outer Worlds 2 and Grounded 2, will continue. Obsidian has a deep history with the Fallout series, including the return of writer John Gonzalez in January 2025 and the involvement of co-creator Tim Cain in an unannounced title.