Obsidian Entertainment Develops New Fallout Game Led by Josh Sawyer

Obsidian Entertainment Set to Develop New Fallout Title Led by Josh Sawyer

According to reports, the studio’s shift toward the Fallout franchise involves collaboration with Bethesda Game Studios. Before receiving the green light for the official Fallout project, Sawyer was previously directing a different role-playing game that shared similarities with the franchise. Former Obsidian designer Chris Avellone claimed on X that Sawyer’s earlier title was originally intended to be a Fallout game before facing roadblocks from Bethesda.

Project Cancellations and Workforce Reductions at Obsidian

The pivot to the Fallout universe comes at a heavy cost for the studio’s existing lineup. Reports indicate that Xbox has laid off approximately a quarter of Obsidian’s workforce, translating to roughly 60 to 70 employees, as part of wider corporate cuts affecting thousands of Microsoft gaming personnel. Concurrently, Obsidian has reportedly cancelled several projects, including a planned sequel to 2025’s Avowed—which had been progressing well internally—alongside multiple unannounced titles.

Obsidian Cancels Avowed 2 to Focus on New Fallout Game Development

Despite these cancellations, the studio is not abandoning all of its previous commitments. Obsidian will continue supporting The Outer Worlds 2 with post-launch downloadable content and remains involved with Grounded 2, whose early access launch was deemed a success by Microsoft. Developers previously assigned to the cancelled Avowed 2 are being reassigned while waiting for larger initiatives, such as the new Fallout project, to ramp up production.

Strategic Shift Under Xbox Leadership

The development green light aligns with a broader strategy championed by Xbox CEO Asha Sharma, who has pushed to prioritize the company’s major, established gaming franchises rather than relying entirely on new intellectual properties. Under this corporate direction, Xbox is focusing resources on tentpole assets like Call of Duty, Halo, The Elder Scrolls, and Fallout.

Industry observers note that the timing also capitalizes on the massive mainstream success of Amazon’s gamerant.com, which introduced millions of new fans to the post-apocalyptic universe and drove player counts for older titles to historic highs. With Bethesda Game Studios remaining heavily occupied with Starfield and The Elder Scrolls 6—the latter of which is not expected until 2028 at the earliest—Obsidian’s new entry is projected to launch before a potential Fallout 5.

Context and Expectations for the Franchise

For longtime fans, the most significant element of the announcement is the return of Sawyer. Released on October 19, 2010, Fallout: New Vegas utilized the Gamebryo engine and has remained widely regarded as one of the finest entries in the series, maintaining a dedicated following for over 15 years. Although Bethesda retained sole control of the intellectual property following its 2021 acquisition of the franchise, this upcoming title marks Obsidian’s first formal return to the universe since their initial collaboration in 2010.

Fallout 5′ in Preproduction, ‘Elder Scrolls 6’ Is Bethesda’s ‘Primary Development Focus’

Because the project is only now commencing development, industry analysts caution that the game will likely require several years before it is ready for release. Additionally, questions persist regarding the timing of Amazon’s television adaptation, which is currently producing a third season, and whether its viewership momentum will align with the eventual debut of Obsidian’s new role-playing experience.