Obsidian Entertainment will pivot to develop a new Fallout game, shelving a planned sequel to Avowed and other unannounced projects. Xbox leadership made the directive, according to Bloomberg reporting. The decision marks a strategic realignment that prioritizes the post-apocalyptic franchise over the studio's existing roadmap.
Obsidian built its recent reputation on The Outer Worlds and the upcoming Avowed, both spiritual successors to classic RPGs. The studio also developed Grounded, a survival game that gained traction on Game Pass. An Avowed sequel represented a natural continuation of that momentum, but Microsoft's push to revitalize Fallout takes precedence.
This move reflects Xbox's broader portfolio strategy. Fallout remains dormant on the AAA development side. Bethesda's last mainline entry, Fallout 4, shipped in 2015. The upcoming Fallout TV series, based on the games, launches this year and will drive renewed interest in the property. Tapping Obsidian, the developer who created the critically acclaimed Fallout: New Vegas in 2010, signals Xbox wants to recapture that formula's critical and commercial appeal.
The shelving of Avowed's sequel stings for players invested in Eora, the game's fantasy world. However, Avowed itself still releases this year, giving the franchise closure rather than abandonment. The decision also affects unannounced projects that remain undefined publicly.
Obsidian joins Bethesda Game Studios in the Fallout ecosystem. Both studios now operate under the same umbrella, creating redundancy that Xbox resolved by assigning Obsidian to the franchise's future. Whether the studio develops a direct New Vegas successor, a new mainline entry, or a spin-off remains unclear. The timing aligns with heightened franchise visibility through