Obsidian Staff Uncertain About Future After Xbox Layoffs Hit Fallout: New Vegas Developer Hard

Employees at Obsidian Entertainment, the studio behind Fallout: New Vegas, are reportedly worried about the future of its projects following significant layoffs by Microsoft's Xbox division. Yesterday, Asha Sharma, Microsoft's gaming head, announced the "most significant" restructuring in Xbox history, with 1,600 staff laid off immediately and another 1,600 expected to leave over the current financial year. As part of the changes, four studios are being transferred to new management, and one is under consultation regarding its future. According to Kotaku, Obsidian lost around 60-70 employees, including some veterans. The studio is known for first-person RPGs like Avowed, The Outer Worlds, Grounded, Pentiment, and Fallout: New Vegas. One source told Kotaku they were unsure how Obsidian's "huge list of projects" could continue after the cuts. Obsidian hasn't announced a new game following the commercial underperformance of Avowed and The Outer Worlds 2, but it's still working on early access title Grounded 2 and The Outer Worlds 2 DLC. Could Obsidian be tasked with a new Fallout or The Elder Scrolls game, or support other projects? Sharma has emphasized Xbox's focus on its biggest franchises, and Bethesda's Jill Braff echoed this, saying the company is shifting from planning around individual studios to prioritizing strong franchises and aligning talent and resources accordingly. Some speculate Obsidian might be directed to create Fallout: New Vegas 2. Last year, Obsidian's VP of operations Marcus Morgan acknowledged the constant fan demand for a new New Vegas, referencing the beloved game that inspired the second season of the hit Amazon TV series.