Obsidian Entertainment laid off staff members across multiple experience levels, hitting both seasoned veterans and recent hires. The cuts affected a 21-year artist alongside an engineer who'd been with the studio for only two months, according to reporting from PC Gamer.
The layoffs struck Obsidian despite the studio's reputation for delivering solid RPGs and action titles under Xbox Game Pass. The developer, owned by Microsoft since 2018, wasn't insulated from the broader cost-cutting wave sweeping through the gaming industry and Xbox in particular. Microsoft has conducted multiple rounds of studio closures and reductions throughout 2023 and 2024, eliminating thousands of jobs across the company's gaming division.
Obsidian's losses illustrate how these reductions affect teams across the board. Losing a 21-year veteran means losing institutional knowledge, established workflows, and creative vision built over two decades. That artist likely shaped the visual identity of multiple Obsidian projects, from Pillars of Eternity to Greedfall. The termination of a two-month employee suggests the cuts weren't strategic pruning but broad reductions that caught people before they could gain footing.
The timing proves particularly awkward for Obsidian. The studio has ongoing projects in development, and losing experienced staff mid-production typically creates workflow disruptions and delays. Veteran departures force junior team members to step up faster than planned, increasing burnout risk across remaining staff.
Xbox's ownership hasn't protected Obsidian from the industry's economic pressures. Game development costs have spiraled, player spending hasn't kept pace with those rising costs, and console manufacturers face pressure to justify their gaming divisions' performance to shareholders. Obsidian found itself caught in that squeeze despite its proven track record and Game Pass integration.
The story reflects a larger pattern. Microsoft's gaming division, once positioned as