Obsidian Entertainment Reportedly Cancelled Avowed 2 And Is Now Working On a New Fallout Title

Obsidian Entertainment, known for video games such as The Outer Worlds, Grounded, and Avowed, was among the many studios affected by Microsoft's recent restructuring. According to initial reports, the studio laid off around 50-60 employees across various departments, including The Outer Worlds art director Daniel Alpert. However, a new report reveals that the developers will be working on a title from one of the most well-known RPG franchises.

Bloomberg has published a new report revealing that Obsidian Entertainment is officially working on a new Fallout installment. This statement from Jason Schreier comes despite the fact that, just last week, he denied a similar claim made by VGC's Jordan Middler. The project is also said to be led by Josh Sawyer, a game designer who played a key role in the development of Fallout: New Vegas, which Obsidian released back in 2010. Additionally, Bethesda Game Studios will be assisting its colleagues with the development.

However, following the announcement of the new Fallout installment developed by Obsidian, Bloomberg reports that the studio had to cancel Avowed 2 and put the story DLCs for The Outer Worlds 2, as well as support for the multiplayer project Grounded 2, on hold. Despite Schreier's claims, former Obsidian head Chris Avellone has already denied this, stating on his X page that Avowed 2 has not been canceled and that development on other studio projects—including an unannounced new Shadowrun title led by John Gonzalez (lead writer of Fallout: New Vegas)—has been temporarily paused, as you can check out below:

Aside from other news, Obsidian employees appear to have been told all the company’s projects were “re-evaluated” today.

It seems Grounded is still going (mostly out-sourced in Eidos Montreal anyway, so no surprise), Outer Worlds 2 expansions still planned for now (1st one is Sept), and uh, despite reports, Avowed 2 is STILL being worked on (for now) in the hopes of being “re-pitched” (whatever that means).

All other projects at the studio, including the rumored Shadowrun game John Gonzalez was on, were put on pause.

It was previously believed that Bethesda Game Studios was responsible for developing the new, fifth Fallout installment, as suggested by Todd Howard's comments linking the game to the same-titled Amazon TV show. However, it now seems more likely that Obsidian's new entry in the franchise will be a separate project—though this has yet to be confirmed. After all, Fallout: New Vegas, released by Obsidian in 2010, was somewhat different from the third installment, developed by Bethesda. It's therefore possible that we could see two separate projects set in the Fallout universe in the near future, which is certainly exciting news for fans.