Obsidian Entertainment is making a new Fallout game. The project is replacing a sequel to Avowed that had already begun development before it was canceled.
reported the change this week, tying it to layoffs at Obsidian and across Xbox. For players in Avowed, that means the studio’s next move is back to a series it helped define with Fallout: New Vegas, rather than deeper work in Eora.
Fallout: New Vegas and now Fallout
Obsidian and Fallout: New Vegas are the cleanest reason this report lands as more than a routine project swap. The studio already has a history inside Fallout, so a return to that world is a business move that fits its portfolio instead of a blind pivot. Readers who follow RPG output will see the logic immediately: the studio is leaning on a proven brand while a different sequel disappears from the schedule.
Last year, Avowed arrived as an action-RPG built in Eora, the fantasy world previously explored in Pillars of Eternity and Pillars of Eternity and its sequel. Players in Avowed could switch between first-person and third-person perspectives, while The Outer Worlds leaned on quests, companions, logs, and dense environments over dozens of hours. Obsidian Entertainment shifts to New Fallout Game after Avowed sequel cancellation
Avowed sequel before launch
The canceled sequel had already begun development, which makes this a sharper cut than a simple pause or delay. That is the part that changes the reading for Fans of Avowed and for anyone tracking Obsidian and its RPG slate: the studio is not just reallocating attention, it is moving from one active path to another.
The tradeoff is obvious. A new Fallout game gives Obsidian a familiar lane, but it also closes off a sequel to a newer fantasy property before it could expand. ’s report puts those two facts side by side, and the contrast is the story.
Layoffs at Xbox
The report says the project change came in the wake of major layoffs at Obsidian and across Xbox. That timing matters because it turns the move into part of a broader reset, not just a creative decision. A studio can change direction; a studio changing direction after staffing cuts signals a tighter slate and less room for parallel bets.
Some of the practical details still sit behind the announcement curtain, but the direction is already clear: Obsidian is back on Fallout, and the Avowed sequel is gone. For now, the meaningful next step is simple—watch for how Xbox frames the new project and whether it treats the canceled sequel as a one-off casualty or part of a larger cutback. Victoria Turner pushes Obsidian Entertainment Class Action Lawsuit in California
