Obsidian Entertainment has cancelled its planned sequel to the 2025 RPG Avowed to focus on a new Fallout game in collaboration with Bethesda Game Studios, according to reporting from Bloomberg confirmed by Windows Central. This shift impacts players across Xbox and PC platforms, given Obsidian’s role within Microsoft’s Xbox Game Studios.
The new Fallout project will be helmed by Josh Sawyer, the director behind Obsidian’s critically acclaimed 2010 game Fallout: New Vegas. The original New Vegas title remains widely regarded by many fans as a standout in the Fallout series, notable for its writing, player agency, and complex gameplay systems.
Sources familiar with Obsidian’s internal plans indicate that, prior to the Fallout assignment, Sawyer was working on an RPG akin to Fallout in structure and theme but unrelated to the franchise. This project has since been shelved to accommodate the new Fallout game, which is being prioritised amid a strategic shift by Xbox to concentrate on its largest IPs.
Details around the extent of Bethesda’s involvement remain unclear. Bethesda, the principal steward of the Fallout intellectual property and developer of mainline Fallout titles since Fallout 3, is collaborating with Obsidian. It is as yet unknown whether this cooperation will be co-development or advisory support.
This announcement comes alongside reports of Obsidian’s recent staff reductions, with around 25% of the workforce laid off, including several senior developers. Despite these cutbacks, the studio will continue working on downloadable content for The Outer Worlds 2 and ongoing development of Grounded 2, while the Avowed sequel remains on hold with potential for revival in the future.
Xbox’s decision to reprioritise projects reflects its aim to accelerate development on major franchises like Fallout. Bethesda is currently focused on The Elder Scrolls 6 following Starfield’s release, and Fallout 5 remains in early stages, making Obsidian’s involvement a notable development for the series’ future on Xbox and PC.
