New Fallout Reportedly Coming From New Vegas Studio Amid Mass Layoffs & Game Cancellations

News surrounding Xbox’s long-rumored layoff spree is continuing to spill out as the bodies stack up and the dust settles. Obsidian Entertainment is one such team Xbox has taken the hatchet to as the console maker continues to flail. A new report has gone into some of these less public dealings, sifting through some of the chaos and revealing how the studio is allegedly developing a new Fallout game.

Bloomberg’s report noted how around 25% of the studio had been let go, something GameFile elaborated on by saying it was 52 people in total. These unfortunate developers are part of the thousands of people Xbox has cut loose, a decision that was met with CEO Asha Sharma stating how the next decade will be “more creative than anything we’ve seen before” and that the publisher will “invest as much” in Xbox as it ever has.

The games Obsidian was making and will make are allegedly being shaken up, too. The aforementioned Bloomberg report revealed that Obsidian will begin developing another Fallout game. Details were scant, but Josh Sawyer will lead the title. Sawyer, who also has a decent following on YouTube, has been in the gaming industry for decades and has been praised for his work on Fallout: New Vegas, Pentiment, Grounded, The Outer Worlds, and Pillars of Eternity, just to name a few. He has held various roles including but not limited to writer, game director, design director, and narrative director. However, Bloomberg’s sources explained how the “emerging strategy is still in flux,” so this could all still change down the line.

Obsidian Entertainment Is Perhaps Most Known for Fallout: New Vegas

Obsidian has been renowned for its work in the RPG genre, developing games like South Park: The Stick of Truth, Star Wars Knights of the Old Republic 2: The Sith Lords, Alpha Protocol, and Avowed, in addition to the aforementioned titles on Sawyer’s resume. However, Fallout: New Vegas is one of its most beloved titles. While it had a notoriously rough launch in 2010, it has since been more revered, as its improved technical state has given players more space to appreciate its quest design and writing. Such qualities are why many hold it up as the best Fallout game.

The setting for this alleged new Fallout title hasn’t been confirmed, though, so it’s unclear if Obsidian will return to New Vegas almost two decades later. New Vegas was, at least, explored in the second season of the popular Fallout television series on Prime Video. This shift is also undoubtedly part of Sharma’s commitment to bigger franchises, which would clearly include Fallout.

However, this pivot to Fallout has come with more cuts. Bloomberg reported Xbox canceled some unannounced games Obsidian was working on, including a sequel the 2025 fantasy RPG Avowed. Xbox previously said Avowed, along with fellow Obsidian game The Outer Worlds 2, didn’t meet sales expectations. This new report stated Obsidian was hoping to use Avowed‘s template to make a sequel in a shorter amount of time, which would also have saved money.

Progress on this follow-up was reportedly going well, and it was slated to be officially revealed within the next year, but, since another Avowed isn’t congruent with Sharma’s directive, it was put on hold. Some are reportedly still chipping away at this likely ill-fated title as they wait for other projects to take shape “perhaps in hope of one day reviving the game.”

Obsidian has been one of the few developers that has actually managed to release multiple games (often completely original ones, too) after being purchased by Xbox in late 2018. Since the acquisition, the team has put out two Outer Worlds games (although the first was technically still published by Private Division), two Grounded titles, Pentiment, and Avowed. While the reception is on a scale, all of these games were received well, with the average scores ranging from 78 to 86. With such a prolific output of respected games, it seems odd to cut the studio down and have it shift gears, especially after the aforementioned Sharma quote speaking to Xbox’s commitment to investment and creativity.

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