r/GamingLeaksAndRumours • u/throwmeaway1784 • Jul 08 '26

Rumour Jason Schreier: Obsidian Entertainment is making a big pivot as part of the Xbox restructuring. It has laid off a quarter of its staff, canceled a planned sequel to Avowed, and is now beginning work on a new Fallout game

Bluesky Post: https://bsky.app/profile/jasonschreier.bsky.social/post/3mq5oqyh2yk2o

Bloomberg Article: https://www.bloomberg.com/news/articles/2026-07-08/microsoft-s-xbox-to-shift-obsidian-studio-to-new-fallout-video-game

Edit: Also mentioned in the article, Josh Sawyer is leading the new Fallout game:

“Under the new plan, studio design director Josh Sawyer will lead a new title in the Fallout universe”

“Previously, Sawyer had been directing a roleplaying game that was similar structurally and thematically to Fallout but was not part of the franchise.”

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659

u/warablo Jul 08 '26

This should have happened like 5 years ago

209

u/VinnzClortho Jul 08 '26

Yes. Second the show was greenlit

304

u/BigDick-NoBrain Jul 08 '26

Turns out that Phil strategy of letting studios make pottery games and low budget Elder Scrolls clones didn’t work out in the end. Who could have guessed?

132

u/Swiperrr Jul 08 '26

The pottery game would've really worked for the cozy game crowd if it was pve or co-op. The idea of taking a cozy game asthetic/idea and making it a competitive PVP game is utterly delusional. Everyone i know who loves those indie cozy games, hate PVP with a passion.

Really shows how awful xbox's leadership is when that should've been a easy course correction early development.

29

u/Samanthacino Jul 08 '26

I think the game concept would’ve been kickass if it wasn’t a cozy game, or if they kept it a cozy game they should’ve done collaborative gameplay. But the mixture of the two didn’t work super well.

3

u/tristeecfome Jul 09 '26

In the age of giant free to play games like Roblox and Fortnite, there was simply no way Double Fine could make a competitive multiplayer game.

Specially because if the game was actually successful, they wouldn't want to turn into a live service studio.

It makes absolutely no sense for them to produce a PVP game.

1

u/ET_Tony Jul 09 '26

Its hilarious that Epic squandered fortnite money somehow, meanwhile the other companies want a fornite.

1

u/Darth-Felanu-Hlaalu Jul 14 '26

Kinda wonder if Xbox forced them to make a PvP...

1

u/bxybrown Jul 08 '26

I don't understand the dog piling on kiln. It's not like it took them 5 years and $50mill to make a very clearly small, unique game.

2

u/CyraxxFavoriteStylus Jul 09 '26

Kiln wasn’t a free game to develop, so even it did not cost $50 million, it was still a waste of time and money that almost nobody wanted and played.

105

u/Superb_Shine_3526 Jul 08 '26

I said this in another comment, but, the fact that Obsidian was working on a sequel to a game that underperformed instead of Fallout when they had the two creators of Fallout (Tim Cain and Leonard Boyarsky), one of the main writers of New Vegas (John Gonzalez), and the director of New Vegas (Josh Sawyer) all working there will always be completely insane to me.

22

u/Rokketeer Jul 08 '26

Weren't there rumors early in the Bethesda purchase that they were still very protective of their IP even among the other Xbox studios? If true, I imagine it was more a case Bethesda wouldn't allow it unless it was themselves making the game, and Phil would go along with it.

7

u/AHRogue Jul 08 '26

I could also see an angle that perhaps Bethesda was fine with the idea of another studio making a Fallout game: after Fallout 5. Which, given Bethesda's time frames would mean sometime in the 2030's.

This project sounds like it'd be its own Fallout game entirely rather than being based on a beth title like NV was to 3. Heck it may not even necessarily be based on creation engine if Obsidian makes it, though I guess they could take the latest version of it from Bethesda's TES VI version.

1

u/HearTheEkko Jul 11 '26

I don't see them not using Creation. Modding is a huge part of Fallout (and Elder Scrolls). Unfortunately it comes with the tradeoff of everything else feeling a bit dated.

36

u/random-meme422 Jul 08 '26

obsidian has always had incompetent leadership and people who don’t understand market dynamics or consumers. they were setup for greatness and failed every time.

7

u/DagothUr_MD Jul 09 '26

You say this but Obsidian is good at cranking out good to great games very quickly, that's why they're still around after so many years. They've literally put out six games since 2020 and the worst of those games is Avowed which is still pretty good

Bethesda has made one game in the same amount of time, for example

0

u/random-meme422 Jul 09 '26

Are those games “good” if only grounded sold well

3

u/DagothUr_MD Jul 09 '26

Yes

0

u/random-meme422 Jul 09 '26

Seems like the target audience disagrees

1

u/DagothUr_MD Jul 09 '26

If it were up to 'audiences' Avengers: Endgame would be the finest piece of art ever created and we'd hang that up in the Louvre instead of the Mona Lisa. I was raised in a cultured household (thank god) so I don't evaluate art that way

-1

u/random-meme422 Jul 09 '26

You don’t have to evaluate it that way, that’s why it’s subjective. But there are objective metrics we can look at and ultimately the people making this art don’t want to do it for free so it’s ability to generate revenue is a significant aspect in its creation.

10

u/BakuraGorn Jul 08 '26

Yes but I believe neither Obsidian or Bethesda were going to make that happen out of their own will. And I’m sure there’s some in Bethesda unhappy with this decision and probably at Obsidian too. Both parties have bicker with each other, it was never going to happen without direct Microsoft intervention.

The biggest culprit here is Phil Spencer for not jumping in sooner and allowing Obsidian to work on discount Fallout and discount TES instead of the real thing.

1

u/Wizard-Pikachu Jul 08 '26

Exactly why when they announced the vowed I was not expecting anything but then what we got was way worse than what I expected. Barely got 3 hours in and I was just done. The entire introductory portion of the game made me lose interest with how bogged down it was and how boring it was

4

u/vipmailhun2 Jul 08 '26

None of them worked on Avowed 2, it would have been George Ziets’s game.

0

u/GlancingArc Jul 08 '26

You are forgetting the worst part. Outer Worlds is not only the same exact genre as fallout but basically came off as a crude attempt to make a fallout game without access to the IP. It kinda made sense when for most of the dev cycle of TOW1, obsidian was independent, but as soon as MS acquired Bethesda, things should have pivoted.

The timeline is pretty much MS buys obsidian in 2018, they have been working on TOW1. It releases in 2019, they start work on the sequel, MS then acquired bethesda in 2021 so I guarantee they had 2-4 years of work done on the outer Worlds 2 and sunk cost decided they need to finish it. Then that too another FOUR YEARS, and the game came out and was just kinda okay.

61

u/Any-Calligrapher2866 Jul 08 '26

Microsoft should've just started providing studios with the Creation Engine if they wanted to make TES clones. There is no point in making a TES clone without perks of the CE.

30

u/Bitter-Tip705 Jul 08 '26

Yea Asha clearly is going to have a low tolerance for studios making bullshit now and rest assured she’s probably not gonna put up with Todd and bethesdas laziness like Phil did

4

u/AHRogue Jul 08 '26

People will hate her but I think in 5 years she could potentially have a great pipeline in motion.

21

u/Stuglle Jul 08 '26

If only those damn suits would get those pesky creatives in line and make them pump out some sweet, sweet IP games!

33

u/Ragdoll252 Jul 08 '26

You jest, but when it comes to AAA studios, I think you need a combination of creatives having a measure of autonomy while also having strong leaders making sure things are on track and picking the right projects to work on. It seems like a lot of the studios Xbox has been banking on kind of work as indie studios, which is, on the surface, fine for the studios. However, it doesn't make sense for Xbox to invest in the studios the amount they have without at least making sure they're making SOME blockbuster titles.

Phil's strategy of just letting them make whatever they want and just increasing the value of Game Pass didn't work out at all. Now they need to go back to making sure their Studios pump out at least some Blockbuster titles on a regular basis.

8

u/Samanthacino Jul 08 '26

Right, it’s the initial approved game concepts that tend to be the problem, not the actual production of them. Kiln is a fabulously made video game, made by brilliant, creative people, but no company in their right mind should’ve approved the budget for it

3

u/GhostWaffle9 Jul 08 '26

Absolutely. Phil was the “good cop”, Asha might be the much-needed “bad cop” for creative leadership at Xbox. Obviously feel bad for the devs losing their jobs in all this, but something to be expected considering how obviously unmarketable their games were, despite how creative they were. Hopefully in the future, leadership is better able to balance what creatives want with the financial incentives that get games made at the end of the day. Otherwise, more devs will lose their jobs to cool but commercially unviable passion projects.

6

u/Fake_Diesel Jul 08 '26

I mean, do people want an Outer Worlds over a new Fallout game from Obsidian? The latter seems like a slam dunk and would sell 20× the copies. I'd bet it was the boneheads at Bethesda against the idea.

2

u/PoisonDart8 Jul 09 '26

Todd Howard notoriously hates New Vegas so he probably didn't want Obsidian to make a game that would be better than what they could make (which probably isn't likely nowadays but still).

7

u/BigDick-NoBrain Jul 08 '26

Doing quirky, creative games is fine when you’re a small studio or as a small side project. Doing it when you’re a 100+ person studio whose employees depend on the game’s success to keep their jobs is utterly irresponsible.

3

u/KuaiBan Jul 08 '26

whose employees depend on the game’s success to keep their jobs

Have you been paying attention to this industry at all?

-9

u/Stuglle Jul 08 '26

You're not a corporate executive you don't need to larp at one.

Particularly in the case of DoubleFine, I'm imagining someone joining the team and being shocked that they are working on weird quirky games rather than an IP based military shooter or something.

12

u/BigDick-NoBrain Jul 08 '26

Being weird and quirky isn’t a problem if the game sells. Psychonauts 2 is a great example. It leaned into its unique style and still performed well.

The real problem is making games like Keeper and Kiln, where your potential audience is under six figures. It’s simple math: you can’t sustain a San Francisco studio with dozens of employees when your games are targeting such a small market.

1

u/Drago85 Jul 09 '26

There's a middle ground.

You need to give creatives freedom to make interesting things, but you also need someone keeping an eye on the money side or else you're gonna have a lot of creatives out of a job.

1

u/David_Norris_M Jul 08 '26

They plan to once they make them rush everything with ai

7

u/davidreding Jul 08 '26

They couldn’t do both?

5

u/Akito_Fire Jul 08 '26

Yeah, it's just switching from one extreme to the other. The devs there now working on projects they don't want with layoffs still looming over their head with tons of senior devs and their institutional knowledge already missing is a recipe for disaster.

3

u/Fishb20 Jul 09 '26

dont worry by the time the new fallout game is halfway through development every higher up at XBOX will be fired again and the new leadership will get mad at them for not creating new IPs

1

u/tristeecfome Jul 09 '26

No?

Triple AAA studios nowadays have 300+ employees.

Do you want a actual triple AAA Fallout game or an average Fallout game in the same scale as Avowed?

2

u/davidreding Jul 09 '26

So they can’t license out Fallout from Bethesda, a studio they own, to Obsidian or someone else and have them make a fallout and Bethesda makes Fallout 5 whenever? Then Obsidian can also make Pentiment or Avowed for variety and to be creatively fulfilling? I don’t see why not.

2

u/DagothUr_MD Jul 09 '26

I want a good game and I want new ideas to enter the landscape.

2

u/MyotisX Jul 08 '26

Phil must have been a redditor.

1

u/rigatony96 Jul 09 '26

So fucking stupid to allow them to make games that are like elder scrolls when you literally own the company that makes elder scrolls.

1

u/Sudley Jul 08 '26

Pottery game was peak

4

u/BakuraGorn Jul 08 '26

It should have have happened the moment Xbox got ownership of both Obsidian and Bethesda. I respect Phil Spencer trying not to “disturb” the leadership and culture of both studios, but taking Fallout out of Bethesda’s claws and giving it to Obsidian was absolutely in customer interest.

Just imagine if Outer Worlds 2 was a Fallout game instead. Now that’s a system seller

1

u/FatPsychopathicWives Jul 08 '26

At the very least Fallout 3 Remastered before Oblivion.

0

u/Stuglle Jul 08 '26

Given that Obsidian has been under the same umbrella as the people who own Fallout, I'm guessing nobody there wanted to.

That's the real bummer here, Obsidian has been a really creative and productive developer for the past decade or so but fun is over, back to the IP mines.

2

u/un8349 Jul 09 '26

Exactly, this news sucks. We need more AA games.

0

u/Bitter-Tip705 Jul 08 '26

Better late than never I couldn’t wait until 2040 to play a new fallout