According to a Bloomberg report by Jason Schreier, Obsidian Entertainment has cancelled its Avowed sequel and other projects to develop a new game in the Fallout universe, led by Fallout: New Vegas and Pentiment director Josh Sawyer. Nothing is officially announced, and no platforms or release window exist yet.
- Bethesda Game Studios will reportedly work with Obsidian on the project.
- A California WARN notice shows 52 Obsidian employees are being laid off as part of a wider Xbox business reset.
- Some staff reportedly remain on the Avowed sequel in case it is revived one day, so the cancellation may not be final.
If you have spent the past fifteen years asking why Obsidian never got another crack at Fallout, the answer may finally be arriving. A report by Bloomberg’s Jason Schreier claims the studio has cancelled a sequel to 2025’s Avowed, along with other projects, and shifted to a new title set in the Fallout universe. The game is reportedly being led by Josh Sawyer, the director behind Fallout: New Vegas and 2022’s Pentiment.
Why Sawyer’s name is the headline detail
Fallout: New Vegas remains, for a large chunk of the fanbase, the high-water mark of the modern series — a spin-off built on the Fallout 3 engine that outshone its host in writing, faction design and player choice. Sawyer was project director on that game, and his more recent work on Pentiment earned widespread critical acclaim. According to the report, Sawyer and his team had actually been developing an RPG similar in nature to Fallout but set outside the IP, which makes the pivot to the real thing a fairly natural fit rather than a cold start.
The report also states that Bethesda Game Studios will work with Obsidian on the project. That is a notable arrangement given Bethesda’s own plate is famously full — Fallout remasters are reportedly further off than expected and The Elder Scrolls 6 is rumoured for 2028 — so handing Fallout duties to the studio that made New Vegas is arguably the most sensible way to keep the series moving.
What it cost: the Avowed sequel and 52 jobs
The pivot has not been painless. Schreier’s report says the Avowed sequel is cancelled, though some employees will reportedly continue working on it while waiting to move to the new project, as there is potential to bring it back one day. The commercial context is hard to ignore here: both Avowed and The Outer Worlds 2 disappointed on sales despite strong reviews, which makes a proven, beloved IP like Fallout an easier bet for the studio’s next big swing.
Meanwhile, a WARN notice filed in California confirms that 52 Obsidian employees are being laid off as part of Xbox’s broader reset of its business. It caps a brutal stretch for Xbox studios — over 100 employees at id Software were let go just a day before DOOM: The Dark Ages | Revelations launched. The one piece of reassurance is that Obsidian itself is reportedly not at risk of closure amid the restructuring.
FAQ
Is the new Obsidian Fallout game officially confirmed?
No. The project comes from a Bloomberg report by Jason Schreier and has not been announced by Xbox, Obsidian or Bethesda. Details could still change.
Who is Josh Sawyer and why does his involvement matter?
Josh Sawyer was project director on Fallout: New Vegas, widely regarded as one of the best entries in the series, and directed 2022’s critically acclaimed Pentiment. His reported leadership is the main reason fans are excited about the project.
What happened to the Avowed sequel?
According to the report, Obsidian cancelled the Avowed sequel along with other projects to focus on the new Fallout title. Some staff reportedly remain on it in case the game is revived in future.
When will the new Fallout game release?
There is no release window, and no platforms have been confirmed. The project appears to be early in development, so a launch is likely years away.