Obsidian Entertainment to develop new Fallout game as Xbox restructures

Obsidian Entertainment announced it will lead development of a new entry in the Fallout series. The project will be overseen by veteran director Josh Sawyer and will involve collaboration with Bethesda Game Studios, which continues to manage the franchise. The shift follows Microsoft’s new Xbox strategy to accelerate releases of its strongest franchises, freeing Bethesda to focus on The Elder Scrolls VI.

The restructuring also led to the cancellation of the planned sequel to Obsidian’s original IP Avowed and resulted in layoffs affecting roughly one‑quarter of the studio’s staff. Despite the cuts, the studio will keep supporting add‑on work for The Outer Worlds 2 and the survival title Grounded 2 while the new Fallout title moves forward.