- 0-20%: Unlikely - Lacks credible sources
- 21-40%: Questionable - Some concerns remain
- 41-60%: Plausible - Reasonable evidence
- 61-80%: Probable - Strong evidence
- 81-100%: Highly Likely - Multiple reliable sources
95%
Highly Likely
Obsidian Entertainment is one of the first-party Xbox studios most affected by the recent wave of layoffs. Kotaku had previously reported that the Irvine-based studio had lost around 25% of its staff, and that figure is now confirmed by two reputable sources: Bloomberg's Jason Schreier and Stephen Totilo, who wrote on Game File that 52 workers were cut from Obsidian based on a WARN (Worker Adjustment and Retraining Notification) notice filed in California.
However, the studio is far from dead. According to Schreier, it's being recalibrated from its previous plans. In November 2025, former Obsidian founder Chris Avellone revealed that the company would create a sequel to 2025's Avowed, while The Outer Worlds would be left dormant. Now, though, with Xbox CEO Asha Sharma openly redirecting funding toward the biggest franchises, Avowed 2 has reportedly been canceled, while a new Fallout game will be prioritized.
The Bloomberg report adds that this project will be led by none other than Josh Sawyer, the Game Director behind the beloved Fallout: New Vegas. Following New Vegas, Sawyer had led the development of Pillars of Eternity and Pillars of Eternity II: Deadfire before admitting to suffering from a bit of burnout. He next tackled the peculiar adventure game Pentiment. Schreier clarifies that Sawyer was already working on a new RPG project, somewhat similar to Fallout, but not part of the franchise. Clearly, that's no longer kosher in light of the new mandate from above.
The fact that Sharma would put Obsidian to work on a new Fallout game is absolutely no surprise; I had assumed as much ever since the Xbox executive had suggested it. That this comes at the expense of Avowed 2 is unfortunate, as I loved the first game and believe it was worth expanding.
At this point, though, I wouldn't be too surprised to learn at some point in the future that Sharma also asked Obsidian to work on a new Elder Scrolls. That's the other big Bethesda IP which, except for Elder Scrolls Online, hasn't gotten anything since 2011's Skyrim. With The Elder Scrolls VI reportedly not coming before 2028 or 2029, the new Xbox boss will want to ensure such a dearth of new releases in a popular IP doesn't happen again.
About the author: With over two decades of experience in gaming journalism, Alessio Palumbo has led the gaming vertical at Wccftech since August 2015. He started working at a young age for Italian websites like Everyeye.it, Gamestar.it, Nextgame.it, and Multiplayer.it before kickstarting the indie English-language publication Worlds Factory as its founder and Editor in Chief. In the last decade, he has coordinated the overall output of Wccftech's gaming section, managed PR relations, assigned reviews, produced daily news coverage, edited gaming content as needed, and delivered game reviews. Arguably, his trademark content is the long series of exclusive developer interviews that have been cited by Wikipedia and by the biggest news media and gaming publications. His passion for technology also makes him knowledgeable when it comes to gaming hardware and tech. His favorite genres include RPGs, MMORPGs, and action/adventure games.
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