More details have emerged about the fate of one of Xbox’s owned studios amidst the company’s layoffs and studio restructures. According to a new report from Bloomberg, Obsidian — the studio behind The Outer Worlds, Neverwinter Nights and South Park: The Stick of Truth, among others titles — has been moved to work on a new Fallout game, and its pitched project Avowed 2 has been put on ice indefinitely. Xbox also allegedly laid off around a quarter of Obsidian’s staff.
The report says that Obsidian is now working on the new Fallout title, with Josh Sawyer taking the lead. Both Obsidian and Sawyer previously developed Fallout: New Vegas, meaning this is an extension of an existing relationship with the franchise. Bloomberg says that Sawyer had previously been working on an RPG similar to Fallout.
Fallout is one of the flagship series of Bethesda, but the studio has not made a new game in the series since 2018’s Fallout 76. The rumor is that it’s focusing more energy on a new entry in the Elder Scrolls series. Given that the Fallout series is currently experiencing a renaissance thanks to the success of the Amazon Prime show of the same name, it makes some sense that Xbox would want to prioritize a new Fallout game’s development.
However, one of the consequences of this planned shift in work is that Obsidian has to put a planned sequel to its recent game Avowed on the shelf. Avowed 2, apparently, didn’t work with Xbox’s plans to support the continuation of the Fallout series. Supposedly, a small team will keep working on the sequel with the hopes that the studio can develop it further in the future. Other teams will also work on DLC for The Outer Worlds 2 and content updates for Grounded 2.