Asha Sharma’s Xbox Overhaul Targets Fallout, and Obsidian’s The Outer Worlds Team Looks Like the Perfect Fit

Obsidian Entertainment has created a lot of great roleplaying games over its 23-year history (the studio's anniversary was yesterday, by the way), but there is little doubt that its name, in the minds of the gaming mainstream, is synonymous with that of Fallout: New Vegas.

The game wasn't actually a unanimous critical darling (it famously "only" got an average Metacritic score of 84, thus narrowly missing the 85 Metacritic score clause that Bethesda had added in the contract for an extra payout), but it certainly became a fan-favorite, owing to its excellent narrative, faction writing, roleplaying choices, memorable companions, and standout side characters, all of which were often compared favourably even with Bethesda's own counterparts in Fallout 3 and 4.

Thus, it's no surprise at all that Obsidian fans have clamored for a New Vegas sequel - or at least a new Fallout game by the studio - ever since Obsidian and Bethesda have been under the same Xbox umbrella. For its part, the development team based in Irvine, California, publicly stated via founder and CEO Feargus Urquhart that it would absolutely be up to make a new game in the franchise.

This followed rumors that Microsoft and Obsidian were discussing it, and the rumor mill spun even faster once the Amazon Prime Video TV show became a smash hit and Microsoft tried to fast-track a new Fallout game. That didn't go too well with Bethesda, though, which, until recently, showed no intention of relinquishing control of its prized franchise once again. Around three months ago, journalist Jeff Gerstmann claimed that a Fallout game in development at another Xbox studio might have been canceled, and that Bethesda would rather staff up itself than give it to someone else.

However, the situation might be about to change. Whereas Xbox CEO Phil Spencer respected Bethesda's wishes, the new Xbox leadership under CEO Asha Sharma and Chief Strategy Officer Matthew Ball has made it crystal clear they will reduce funding for minor projects (possibly leading to layoffs and at least one studio closure soon) to funnel more investment into the franchises that really move the needle for the Xbox division, which is allegedly fighting for its survival now as Microsoft is still evaluating whether to spin it off, make it a subsidiary or a joint venture, and/or sell it.

In the public memo shared this past Wednesday, Sharma wrote:

We are the fortunate stewards of industry-defining franchises that have enormous potential and player demand, but we have not adequately funded them to compete and win.

Yesterday, insider website The Information confirmed this includes "moving faster on developing new games from beloved franchises it owns", with Fallout and Elder Scrolls singled out as "two particular areas of focus for Sharma". Well, it just so happens there is an Obsidian team whose expertise is practically a perfect fit for the post-apocalyptic franchise.

I'm of course talking about The Outer Worlds team. The IP was presented from its very inception as a more whimsical take on Fallout in space, and while the first two games were a lot of fun, we've known from late last year that there are no plans for a third installment due to low sales.

The Outer Worlds is very similar to Fallout in many ways, offering a mix of shooter and RPG with both first and third-person views available in the second game. Moreover, its team is full of creatives who actually worked on Fallout. Leonard Boyarsky, Game Director on both TOW games, worked on Fallout 1 & 2 alongside Tim Cain, who was Game Director on the first The Outer Worlds and a consultant on the second one, and returned to work full-time at Obsidian in December 2025. Meanwhile, Fallout: New Vegas writer John Gonzalez also came back to Obsidian last year, though he publicly said he wouldn't be working on New Vegas 2.

It's entirely possible that Gonzalez, Cain, and the team might have started pre-production on something else, perhaps even a new IP. But the new Xbox executives are clearly determined to do whatever it takes to turn the division around, and prioritizing a new Fallout game is reportedly chief among their plans. Bethesda Game Studios won't be ready to start working on Fallout 5 until they're done with The Elder Scrolls VI, which might not be for another year or two; the quicker path for Sharma is clearly to ask Obsidian's The Outer Worlds team to pivot to a new game in Bethesda's franchise.

Whether it is a New Vegas sequel or another spin-off set elsewhere matters little; fans would be incredibly excited upon learning such news either way. Now, there is the engine issue: Obsidian has been using Unreal Engine for their last projects, and switching back to Creation Engine might prove troublesome. However, it is not inconceivable that Microsoft would allow them to continue using Unreal Engine, foregoing the usual mod support provided by the Creation Engine in favor of greater polish and a more impressive visual presentation.

This is all speculation for now, but all signs point that way. Microsoft wants more Fallout, and they already have a team with all the experience they could possibly need to make such a game. We'll see if it actually happens, but I'm betting my own five cents right now.

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