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Obsidian Entertainment has canceled a planned sequel to Avowed while beginning work on a brand-new Fallout game reportedly led by New Vegas director Josh Sawyer. At the same time, the studio has reportedly been hit by significant layoffs, raising questions about Microsoft's long-term strategy for Xbox Game Studios.

Is prioritizing Fallout the right decision? From a business perspective, it makes sense. Fallout is one of Xbox's biggest franchises, especially after the success of the TV series. But does today's Obsidian still have what it takes to deliver another RPG on the level of Fallout: New Vegas?

Do you think Microsoft made the right call, or should Obsidian have continued building the Avowed franchise instead? Let me know your thoughts in the comments.

#fallout #obsidian #falloutnewvegas #avowed #xbox #bethesda #gamingnews #rpg #xboxgamestudios #gaming #videogames #microsoft #gamedevelopment

Source: https://www.gematsu.com/2026/07/bloomberg-obsidian-entertainment-cancels-avowed-sequel-starts-work-on-fallout-title-amid-layoffs

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Transcript
00:00Rejoice people, for I have some very interesting news to share with you today.
00:04Because apparently, according to this article, Obsidian Entertainment cancels a WoW sequel
00:09and starts to work on Fallout title amid layoffs.
00:13And if this report is accurate, I think there are three separate stories here
00:17and it's important not to lump them together.
00:19The first one is cancelling an WoW sequel.
00:22And that's probably because it didn't become the breakout hit Microsoft probably wanted.
00:27I mean, let's be real here.
00:28If you play that game, that can never be a hit.
00:32Not in a million years.
00:34And to be honest, this news is amazing because a WoW was very fucking bad.
00:39I mean, yes, it reviewed reasonably well.
00:42At least when we are talking about mainstream critics.
00:46But for people like you and me, especially when you think about it's coming from Obsidian,
00:51it was a very lackluster experience.
00:54And I'm being generous here.
00:56So, I guess for Microsoft, it didn't create a kind of cultural impact that makes executives
01:01immediately greenlight a long franchise.
01:04So, even if development was going well, that's not the only thing executives look at.
01:09They are probably asking questions like, will it sell enough?
01:13Spoiler alert, it won't.
01:14Is this the best use of 200 to 300 developers?
01:18Absolutely fucking not.
01:19And does it strengthen Xbox's portfolio?
01:23And I'll give you the answer right away.
01:25No, it doesn't.
01:26So, as you might have guessed, it's not going to do any of these things good, especially if
01:31you compare it to Fallout.
01:33And then, from a business standpoint, the decision makes sense.
01:36I mean, this would have been even more obvious if one of these Xbox people actually plays
01:42whatever the hell they put on the Xbox store, and they would axe this thing immediately.
01:47But, for some strange reason, a WoW 2 was still a thing.
01:52Well, not anymore.
01:53Or at least, not to a degree that was reported previously.
01:57Because, what's interesting is that the article says some developers remain assigned to a WoW-ed
02:03related work while waiting for Fallout to ramp up.
02:06Now, I don't know about you guys, but if I was the Xbox executive, I would scrap a WoW-ed
02:12related work, or whatever the hell that means, immediately, and shift everyone to new Fallout
02:18project.
02:19But, sadly, or for better or for worse, I'm not one, so it seems that Microsoft isn't
02:24necessarily killing the IP forever, and maybe they're just simply putting it on a shelf.
02:29And, who knows, maybe they'll take the shelf away and just burn it to the ground.
02:33Because that would be the best possible solution ever.
02:35Now, Fallout is the obvious franchise to prioritize, because Fallout is simply worth more.
02:41And, not to mention, Fallout franchise, at least in Microsoft's hands, was basically collecting
02:46dust somewhere in the Microsoft basements on some forgotten shelf.
02:50And, we need to take one thing into account, which is, after the TV series, Fallout has
02:55arguably become Bethesda's hottest IP.
02:58You have Fallout 4 experiencing a huge resurgence.
03:02And, obviously, it is, because there isn't anything else Fallout related to play, at least
03:07when we are talking about single player games.
03:09Then, you have Fallout 76, that has been apparently healthier than many expected.
03:14And, that's a game I will never play, because not only it launched in a horrible state, and
03:21that's always gonna make a mark in my psyche, but more importantly, that game is a festering
03:27pile of microtransaction hell.
03:30And, my hands are never going to touch that.
03:33But, yeah, the TV show introduced millions of new fans to the Fallout franchise.
03:37And, Microsoft needs major exclusive franchises.
03:40So, if Xbox is trying to recover from layoffs, studio closures, and disappointing hardware
03:46sales, betting on Fallout is one of the safest moves they can make.
03:50And, let's be honest, from a purely financial perspective, I would invest in Fallout before
03:55allowed every single time.
03:57However, this new Fallout thing, it's not that simple, because I am not convinced Obsidian is
04:04the right Obsidian anymore.
04:05You see, whenever people hear Obsidian making Fallout, they immediately think of Fallout New
04:11Vegas.
04:12And, I talked about this topic in one of my previous videos, you can go check it out if
04:16you wanna.
04:16But, the point here is that the studio that made New Vegas in 2010 is not the same studio
04:22anymore.
04:23Many of the people who define New Vegas has left over the years.
04:26And, the leadership, designers, writers, and overall development culture has changed significantly.
04:32And, that's why I think people should manage their expectations.
04:37Because, if you expect New Vegas too, I think you might be setting yourself up for disappointment.
04:43And, trust me, I wouldn't say this.
04:45But, when I take into consideration what kind of games Obsidian produced so far, I think this
04:51advice is extremely well placed.
04:54But, wait.
04:55There is more.
04:56Because, John Sawyer might change the equation, and he might be the biggest reason for optimism.
05:02You see, John Sawyer directed New Vegas, and has consistently shown he understands what makes
05:08Fallout compelling.
05:09He's also been behind projects like Pentiman, which demonstrated that he still excels at player
05:14choice, writing, and RPG systems, even on a smaller budget.
05:18So, if he's genuinely leading the Fallout project, that's about as reassuring as this report gets.
05:24Problem is, he has one big challenge, and that is that one director cannot recreate the entire
05:30New Vegas team.
05:31Which brings me to the final point of this report, and that is that the layouts are worrying
05:36me more than the game announcement.
05:39Because, when you lay off roughly a quarter of studio, while simultaneously starting a massive
05:44RPG, well, there's no other way to say it.
05:47It's concerning.
05:48Because, large RPGs benefit from continuity, and losing experienced developers can mean several
05:54things.
05:55For example, the institutional knowledge disappear.
05:57Then you have onboarding for new people.
05:59That can take time.
06:00Which then means that production will slow.
06:03And, when that happens, and you're not hitting your goals, morale often takes a hit.
06:08Now, it is possible the layouts were targeted at council projects rather than the Fallout team,
06:13but it still introduces risk.
06:16Overall, I would say, I think this is a rational business decision.
06:20And I'm purely speaking about a Vought being axed.
06:23Because, if Microsoft asked me whether to spend hundreds of millions of dollars on another
06:28Vought or a new Fallout, I would pick Fallout every single time.
06:33However, I also think many fans are romanticizing what this means.
06:37And, I will say again, and again, and again, this isn't the 2010 Obsidian returning to make
06:44New Vegas.
06:45It's a different studio, under different management, working with Xbox's current corporate structure.
06:50Obviously, that doesn't mean the game cannot be great, because there is potential there,
06:55especially with John Stoyer's involvement.
06:57However, I wouldn't assume this automatically guarantees another good game.
07:03And, you know what's also funny?
07:05Ironically, this news also reinforces a point I already raised before in one of my previous
07:11videos.
07:12Obsidian, as a name, isn't enough anymore.
07:15The quality of recent releases like Avowed and The Outer Worlds 2 has led me to question
07:21whether the studio still consistently can deliver genre-defining RPGs.
07:26And if this Fallout project succeeds, it will likely be because of the theme and creative
07:32direction behind it, not simply because the logo says Obsidian.
07:37And that's basically my take on this news.
07:39Thanks very much for watching.
07:40And as always, like, share, subscribe, comment, all that good stuff.
07:45And that's it from me.
07:46Until the next one.
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