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EuroGamer
New Vegas studio Obsidian reportedly moved onto a new Fallout game by Xbox, but at the cost of a sequel to Avowed
Following significant layoffs at Xbox, Obsidian Entertainment is reportedly shifting its development focus to work on a new game in the Fallout franchise, as confirmed by a Bloomberg report. This decision comes at the expense of multiple cancellation announcements, including the sequel to the highly regarded RPG Avowed, which was set for a 2027 reveal. Xbox aims to concentrate on its major franchises, highlighting Fallout’s importance in their portfolio due to recent interest spikes, including two successful live-action series. This shift indicates a strategic priority by Xbox to capitalize on their most valuable intellectual properties, especially as development on The Elder Scrolls 6 continues.
MonitorConfidence: HighMid term horizonTalent displacement risk: High
Published 9 Jul 2026, 12:52 UTC1 min read
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Summary
TL;DR
- Obsidian has been reassigned to work on a new Fallout title.
- The company suffered extensive staff cuts, losing a quarter of its employees.
- Avowed's sequel was canceled, despite positive early development.
- Josh Sawyer, known for Fallout: New Vegas, will lead the new Fallout project.
- The shift reflects Xbox's focus on major franchises amidst restructuring.
Interesting facts
- Obsidian's track record with Fallout strengthens its suitability for the project.
- Fallout: New Vegas is the only non-Bethesda-developed title in the franchise.
- The cancellation of Avowed’s sequel could indicate broader industry trends affecting RPG development.