Microsoft Allegedly Halts Avowed Follow-Up as Obsidian Shifts Attention to Fallout Project
Developer affected by Xbox layoffs as it shifts focus.
Obsidian Entertainment, known for titles like the Pillars of Eternity series, The Outer Worlds, and Fallout: New Vegas, is undergoing a significant restructuring in light of widespread layoffs within Microsoft’s gaming division. Multiple projects have been put on hold, including a sequel to Avowed, as the studio pivots to concentrate on developing a new Fallout title.
The development of this new Fallout game is reportedly being led by Josh Sawyer, director of Fallout: New Vegas and the adventure game Pentiment. Reports indicate that Microsoft is prioritizing its successful franchises such as The Elder Scrolls, Doom, Wolfenstein, and Fallout. This focus is especially pertinent as Fallout 76, released in 2018 as a multiplayer survival game, remains the latest installment and the franchise has seen renewed popularity with a successful streaming series on Amazon Prime Video.
Accompanying this shift in strategy, the studio is also implementing layoffs. Reports indicate that around 25% of Obsidian’s workforce is being cut, with 52 employees losing their jobs—43 from the in-office team in Irvine, California, and nine remote workers in the state. Additionally, reports suggest that sister studio id Software, known for the Doom franchise, is also making significant cuts, reducing its staff by nearly half, affecting over 90 employees. Overall, Microsoft plans to eliminate around 3,200 positions outside of its gaming division as well.
After acquiring Obsidian Entertainment in 2018, Microsoft expanded its gaming portfolio further with the acquisition of Activision Blizzard King in 2022. The ongoing layoffs at Xbox and its affiliated studios are part of new Xbox CEO Asha Sharma’s strategy to address the challenges facing Microsoft’s gaming sector, although these significant cuts may complicate efforts to produce high-quality games.
