Multiple outlets report conflicting information about the status of Obsidian Entertainment, the studio behind The Outer Worlds and currently developing Avowed, within Microsoft’s Xbox Games Studios. One report, citing The Game Business, lists Obsidian among several studios described as being at risk of closure, alongside Ninja Theory (Hellblade), Compulsion (South of Midnight), Double Fine (Psychonauts), and Undead Labs (State of Decay 3). Another report from VICE says Obsidian is among internal Xbox studios in “deep negotiations” with Microsoft aimed at avoiding closure, framing the situation as ongoing discussions.
However, a separate Pushsquare update counters that claim, stating that Obsidian is not at risk of closure, according to a newer assertion. Across the coverage, the central theme is uncertainty: some reporting frames Obsidian as potentially threatened in the context of broader Xbox cuts, while other claims dispute that characterization. None of the provided excerpts include definitive outcomes or official confirmation of closures.
