Obsidian Entertainment is reportedly walking away from an Avowed sequel to build something fans have wanted for well over a decade, a brand new Fallout game. The news comes from Bloomberg’s Jason Schreier, whose report landed the same week Xbox pushed through another brutal round of layoffs. It’s a huge story with a bittersweet edge, because this pivot didn’t come cheap.
According to Schreier, Xbox has scrapped a planned Avowed follow-up and redirected Obsidian toward a new entry in Bethesda’s post-apocalyptic franchise. The kicker is who’s leading it. Studio design director Josh Sawyer, the man who directed Fallout: New Vegas back in 2010, is said to be steering the project. If you’ve spent any time in the Fallout community, you already know how loaded that name is. Sawyer running a fresh Fallout game is close to a dream scenario, even if the circumstances around it are anything but dreamy.
Bloomberg notes that Sawyer was previously working on a separate RPG described as structurally and thematically similar to Fallout, just not set inside Bethesda’s universe. Now, it seems, he’s getting the real thing.
Avowed 2 Got the Axe
Progress on the sequel was reportedly going well, and it was on track to be announced within the next year. And from the reports, we know that this wasn’t some troubled project quietly circling the drain. It was moving forward without a hitch.
So, the problem was strategy, not quality. Sources told Bloomberg the sequel simply didn’t fit into new Xbox CEO Asha Sharma’s overall plan for the division. The original Avowed, which launched in 2025 out of Obsidian’s Pillars of Eternity setting, underperformed against sales expectations, and that clearly weighed on the decision. Avowed 2 wasn’t the only casualty, either. Multiple unannounced Obsidian projects were reportedly cancelled in the same shake-up.
There’s a small sliver of hope worth flagging. Bloomberg reports that a handful of developers will keep chipping away at the Avowed sequel while Fallout ramps up, possibly leaving the door open to revive it down the line.
The Human Cost Behind the Shift
It’s easy to get swept up in the Fallout excitement and forget what this reshuffle cost. Obsidian lost roughly a quarter of its workforce this week. A WARN notice filed in California and reported by Game File confirms 52 employees were let go, including 43 at the studio’s offices and nine remote workers based in the state.
So, that’s a rough backdrop for any project, let alone a AAA RPG. A new Fallout game headed by Sawyer sounds fantastic on paper, but it’s launching out of a moment where a big chunk of the team just lost their jobs. Worth keeping in mind before anyone declares this a total win.
A Few Important Caveats
Before you get too hyped, remember this is all based on reporting, not an official announcement. Xbox has declined to comment, and Bloomberg itself describes the strategy as still in flux and subject to change. Nothing here is locked in stone, and a new Fallout of this scale is realistically years away from release. Sawyer directing it is genuinely exciting, but this is a wait-and-see situation, not a countdown.
Still, if it holds together, this could end up being one of the smarter creative calls Xbox has made in a while. A New Vegas director back in the wasteland is exactly the story Fallout fans have wanted to write for fifteen years.
