An ‘Avoyed’ sequel has been canceled and the studio is now back on ‘Fallout’.
Obsidian Entertainment is reportedly returning to the Fallout franchise as part of Xbox’s broader restructuring, according to Bloomberg. The studio, which developed the fan-favorite Fallout: New Vegas in 2010, is said to be working with Bethesda Game Studios on a new Fallout title led by Josh Sawyer, one of the project directors of New Vegas. Sawyer had previously been developing an original RPG inspired by Fallout before the project was reportedly shifted into the Fallout universe.
The reported move comes after Xbox announced sweeping organizational changes this week. Obsidian, a subsidiary of Microsoft, has reportedly laid off around 25% of its workforce as part of the company’s restructuring efforts. Xbox CEO Asha Sharma has said the company is resetting the organization to reduce management layers and focus more heavily on its biggest franchises.
As part of the shake-up, Obsidian has reportedly canceled its planned Avowed sequel along with several other unannounced projects. Bloomberg reports the sequel had been progressing well and was expected to be announced within the next year before it was scrapped. A small team is continuing to work on the Avowed sequel while waiting for Fallout and other assignments. It’s farther along than people thought, and with hopes Xbox will eventually un-cancel it. Obsidian is expected to continue supporting The Outer Worlds 2 with downloadable content and remain committed to its multiplayer survival game Grounded 2.

The changes also reflect Microsoft’s renewed emphasis on the Fallout franchise. While Bethesda Game Studios remains focused on its own long-term projects, including the eventual Fallout 5, Obsidian’s reported return would mark the first new single-player Fallout project involving the studio since Fallout: New Vegas. Meanwhile, Amazon’s Fallout TV series is currently filming its third season, as Xbox looks to expand one of its biggest entertainment properties across games and television.
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where's the source? according to who?