Multiple reports say Obsidian Entertainment has changed direction on upcoming projects following Microsoft’s internal reassessments and recent Xbox studio layoffs. Bloomberg reports that the company is no longer pursuing a planned sequel to Avowed, with development redirected toward a new Fallout title. The new Fallout project is described as being led by Josh Sawyer, who directed Fallout: New Vegas. The reports also link the change to broader disruptions affecting Obsidian, including layoffs in which about a quarter of the studio’s workforce was reportedly cut, along with cancellations of multiple games in development.
While the outlets agree on the core shift—Avowed sequel cancelled and a new Fallout game taking its place—the specific internal rationale beyond the reported layoffs and reprioritization is not detailed in the provided accounts. As described, Obsidian’s development focus is moving toward a Fallout project under Sawyer’s leadership, replacing work that was previously aimed at extending Avowed. No release date or platform information is included in the sources summarized here.
