Obsidian Responds to Critics While Continuing Avowed 2 Development
WHO:
Kotaku - Obsidian Entertainment, Xbox, game director of The Outer Worlds 2, Asha Sharma (Xbox CEO), Josh Sawyer (studio design director)
Push Square - Jason Schreier (Bloomberg journalist)
WHAT:
Kotaku - Obsidian Entertainment reportedly lost a quarter of its staff in the recent layoffs.
Push Square - A small team of developers will continue work on the Avowed sequel in hopes of getting it "uncancelled."
Push Square - The Avowed sequel was described as being "further along than most people would guess" for a sequel to a game that came out last year.
Eurogamer.net - Brandon Adler, who has worked at Obsidian for 13 years, expressed pride in the studio's history and excitement for its future.
Kotaku - Obsidian was hit by a wave of 1,600 mass layoffs across Microsoft’s gaming division, with 50 staff cut from the studio.
Kotaku - The development plans shifted from an Avowed sequel to a new Fallout game.
Push Square - An Avowed sequel was reportedly cancelled internally, but a small team will continue to work on it in hopes of getting it "uncancelled."
Push Square - The Avowed sequel was described as being "further along than most people would guess."
WHERE:
Kotaku - Obsidian Entertainment is located under Microsoft's gaming division.
WHEN:
Push Square - The layoffs and changes in development plans occurred in the same calendar year as the release of Avowed, Grounded 2 (Early Access), and The Outer Worlds 2.
WHY:
Eurogamer.net - Xbox's decision to move Obsidian onto the Fallout franchise aligns with the company's intent to focus only on its biggest franchises.
Kotaku - The layoffs and shift in focus are part of Xbox's strategy to double down on its biggest franchises and retreat from the Game Pass-era strategy.
Push Square - The focus shifted to a new Fallout game to align with Xbox's vision for the platform.
HOW:
Kotaku - Brandon Adler criticized misinformation about Obsidian's current state and emphasized that the same people are in lead roles as those who worked on previous successful games.
Kotaku - The game director expressed his thoughts on LinkedIn, addressing the speculation and misinformation about Obsidian's current state and future.
Push Square - A small team of developers will continue work on the Avowed sequel until the new Fallout project requires more staff.
(UPDATED July 11, 2026 22:15 UTC)
Obsidian Entertainment has reportedly lost a quarter of its staff in recent layoffs, but a small team of developers is determined to continue work on the Avowed sequel in hopes of getting it "uncancelled." Despite the challenges, the sequel is said to be "further along than most people would guess," and Brandon Adler, a long-time employee, expressed pride in the studio's history while addressing misinformation about its current state. He emphasized that the same leadership team remains in place, focusing on the studio's future and its alignment with Xbox's strategy to concentrate on its biggest franchises.
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(UPDATED July 11, 2026 19:21 UTC)
Obsidian Entertainment has been significantly impacted by a wave of mass layoffs across Microsoft’s gaming division, resulting in 50 staff cuts from the studio. As part of a strategic shift, development plans have moved away from an Avowed sequel, which was reportedly further along than expected, to focus on a new Fallout game, although a small team will still work on the Avowed project in hopes of reviving it. The game director has addressed the situation on LinkedIn, clarifying the current state of Obsidian and the future direction of their projects amidst the changes.