In a nutshell

• Obsidian cancels Avowed sequel, lays off 52 staff.
• New Fallout title in development, led by Josh Sawyer.
• Studio continues work on The Outer Worlds 2 DLC and Grounded 2.

Following the massive layoffs announced as part of the “Xbox Reset,” more layoffs are being reported throughout the rest of the studios.

Fallout Returns Under Obsidian

According to a report by Bloomberg’s Jason Schreier, Obsidian Entertainment has canceled multiple projects, including a planned sequel to Avowed, while laying off a quarter of its staff.

A WARN notice filed in California, as seen by Game File, confirmed 52 employees were let go. The studio is now shifting focus to a new Fallout game, led by design director Josh Sawyer, who previously directed Fallout: New Vegas.

Avowed Sequel Halted

Sources told Bloomberg that progress on the Avowed sequel was strong and on track for an announcement within the year, but the project did not align with Xbox CEO Asha Sharma’s broader strategy. Some developers will remain on the project in hopes of reviving it in the future.

Other Projects Continue

Despite the restructuring, Obsidian will continue developing downloadable content for The Outer Worlds 2 and work on Grounded 2. The studio’s pivot marks a major shift as Xbox undergoes widespread layoffs and project cancellations across its divisions.