Xbox pushes Fallout series faster as Obsidian studio fate sparks rumors

Microsoft Xbox’s new head, Asha Sharma, is accelerating development on major franchises such as Fallout, Skyrim and Halo, aiming to “reset” the gaming business. Fallout fans are speculating about the impact of a quicker schedule, while former Bethesda developer Bruce Nesmith warned that “shortening development cycles carries the risk of fan fatigue,” citing potential quality and bug issues.

Rumors have circulated that Xbox may shutter the studio behind Fallout: New Vegas, Obsidian Entertainment, alongside other studios like Compulsion and Arkane. A report from The Game Business suggested Obsidian was in negotiations to avoid closure, but journalist Jason Schreier later said on Bluesky he “can confirm Obsidian is not in negotiations to avoid shutting down.” The speculation follows broader concerns about Microsoft’s restructuring, layoffs and a focus on profitability after a weak performance from Call of Duty: Black Ops 7.

The push to speed up releases comes amid Microsoft’s large investment in game content—over $20 billion in the past five years—while the company seeks to maintain profitability and avoid further studio cuts.