NewsBite analysis · Gaming
Engadget
Microsoft reportedly cancels Avowed sequel as Obsidian focuses on a Fallout game
Obsidian Entertainment, known for titles like Pillars of Eternity and Fallout: New Vegas, has reportedly canceled plans for a sequel to its game Avowed. This decision comes as the studio shifts its efforts to develop a new Fallout title under the leadership of Josh Sawyer, which is seen as part of Microsoft's strategy to concentrate on its successful franchises. Concurrently, the studio is experiencing significant layoffs, with around 52 employees affected, as Microsoft undertakes a larger restructure within its gaming division, including a 3,200 job cut across the company.
MonitorConfidence: HighShort term horizonExecution risk: High
Published 8 Jul 2026, 20:25 UTC1 min read
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Summary
TL;DR
- Obsidian Entertainment cancels Avowed sequel.
- Focus redirected toward a new Fallout game.
- Josh Sawyer leading development on Fallout.
- Obsidian lays off around 25% of its workforce.
- Microsoft undergoing significant restructuring.
Interesting facts
- The new Fallout game comes after the series was revived by a hit streaming adaptation on Amazon.
- Obsidian's pivot reflects Xbox's strategy to lean into established franchises.
Coverage gaps
- Details on the exact reasons for the focus shift and cancellations