Obsidian Cancels Avowed 2 to Focus on New Fallout Game Development

Obsidian Entertainment Shifts Focus: Fallout Development and the Future of Avowed

Obsidian Entertainment is developing a new Fallout game, according to a report by Bloomberg. This strategic pivot marks a significant change for the studio, which has previously worked in the Fallout universe on 2010’s well-received Fallout: New Vegas. The new project will be led by studio design director Josh Sawyer.

The report states that the studio has canceled several in-development projects to facilitate this shift, including a planned sequel to its 2025 RPG, Avowed. Development of Avowed 2 was reportedly going well and was on track to be announced within the next year. However, the sequel did not fit into the new company strategy implemented by Xbox CEO Asha Sharma, which focuses on the division’s biggest existing franchises. Bloomberg notes that while the project is effectively shelved, some employees will continue working on it as the new Fallout project comes together, in hopes of a potential revival.

Restructuring and Personnel Changes

The shift in development priorities follows ongoing layoffs across Xbox’s gaming division. These workforce reductions have reportedly impacted roughly 25% of Obsidian’s staff. Among those affected is long-time art director Daniel Alpert.

Avowed was one of three games Obsidian released in 2025, alongside Grounded 2—which launched in Early Access—and The Outer Worlds 2. The cancellation of the Avowed sequel follows the launch of the original title, which arrived last year as an action-RPG set in Eora, the fantasy world previously explored in Pillars of Eternity and its sequel.

Exploring the World of Avowed

For players currently experiencing Avowed, the game offers a first-person fantasy action RPG experience set on the mysterious island of the Living Lands. In the game, the air hums with ancient magic, the flora moves with a mind of its own, and the ground beneath the player’s feet shifts with secrets. The narrative centers on a dire threat: a mysterious plague that defies nature and reason, spreading chaos across the wilderness. Players act as an envoy of Aedyr sent to investigate, but what begins as a mission of duty becomes deeply personal as the land seems to recognize them.

In Avowed, players engage in combat using abilities and weapons from multiple character classes, navigating both first- and third-person perspectives while exploring diverse environments. The choices made by the player ripple across the Living Lands, shaping the fates of its people, its creatures, and the player themselves. The game challenges players to navigate a web of intrigue, power, and danger to uncover the truth and save the unknown frontier from forces threatening to tear it asunder.

Reviewers have noted the depth of the experience. Paul Tassi, writing for Forbes, described Avowed as “Microsoft’s big new RPG by Obsidian that serves as something of a stopgap in the decade between Elder Scrolls games.” After sixty hours of playtime, Tassi highlighted the importance of resource management within the game, specifically advising players to “buy every lockpick they have” from vendors, noting that while there is no lockpicking minigame, locked chests and doors require multiple lockpicks to open. Tassi also pointed to the gear upgrade system, which allows players to take items through a series of rarity upgrades by sinking in materials.

As the studio moves toward its new Fallout title, the legacy of Avowed remains as a recent entry in the Obsidian catalog, providing players a window into the fictional world of Eora.

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