Image credit: Bethesda / Obsidian

Days after Microsoft's devastating 3200 job cuts at Xbox, the true scope of the redundancies is becoming clearer. Obsidian Entertainment, which reportedly lost a quarter of its staff in the cuts, has had its priorities shifted too.

According to a new Bloomberg report, Xbox decided to move Obsidian onto the Fallout franchise, in alignment with the company's stated intent to focus only on its biggest franchises. And interestingly, this project is said to be a new Fallout game, not a remaster of an existing title.

As a result of the cuts and the shift in development focus, Obsidian has apparently had to cancel multiple projects, including a sequel to 2025's well-received role-playing game Avowed. The report says development "was going well" and that it was set to be unveiled in 2027.

As for the Fallout game, the report says it will be led by studio design director and industry veteran Josh Sawyer, which makes sense. Sawyer directed one of the most beloved and critically acclaimed games in the series, Fallout: New Vegas, for Obsidian. Coincidentally, one of the cancelled projects, also led by Sawyer, was an RPG in a similar vein thematically and structurally to Fallout, per the report.

New Vegas is the only non-Bethesda-developed Fallout since the studio acquired the rights to the series. The game is beloved for its engaging narrative and meaningful choices.

The news is hardly surprising. Fallout is one of Xbox's most important brands, especially after two successful live-action television series on Amazon Prime, and Obsidian's track record with Fallout makes it a perfect candidate to take it on. While Bethesda focuses on The Elder Scrolls 6, then, Obsidian will lead the next Fallout game.

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