Obsidian is making a new Fallout game, led by New Vegas director Josh Sawyer — but Avowed 2 is dead

Microsoft's massive Xbox restructure has reshuffled Obsidian Entertainment's entire roadmap. According to a Bloomberg report, Xbox has moved the studio onto a brand-new Fallout game — not a remaster — while cancelling several in-development projects, including a sequel to Avowed, the well-received 2025 RPG.

The new Fallout will be led by Josh Sawyer, Obsidian's studio design director and the man who directed Fallout: New Vegas. The Avowed sequel was reportedly going well and was set to be unveiled in 2027 before the axe fell. One other cancelled project, also led by Sawyer, was described as an RPG thematically and structurally similar to Fallout. All of this comes on the heels of Obsidian losing roughly a quarter of its staff in the broader Xbox layoffs that also shuttered Double Fine, Compulsion Games, Ninja Theory, and Undead Labs.

Obsidian making a Fallout game is about as logical a fit as Xbox could find. New Vegas remains the only Fallout title developed outside Bethesda since the studio acquired the franchise, and it's widely regarded as one of the best entries in the series. With Bethesda locked in on The Elder Scrolls 6, handing Fallout to Obsidian keeps the franchise moving without pulling Bethesda off its current project. Xbox has also been explicit about doubling down on its biggest brands, and Fallout's profile has only grown since two successful Amazon Prime live-action series.

Online reaction has been a mix of excitement and skepticism, with some arguing Obsidian has lost the writers and talent that defined its classic era. Obsidian game director Brandon Adler pushed back hard on LinkedIn, calling those takes "an enormous amount of misinformation" and pointing out that many of the same people in leadership roles today were there for KotOR2 and New Vegas. "The through line from KotOR2 to our current games is pretty clear," he wrote, adding that the past week has been "extremely difficult" as the studio said goodbye to friends and colleagues caught in the cuts.