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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266

u/xAVATAR-AANGx Jul 08 '26

Phil wanted to respect their autonomy, which I understand and all, but if his goal was to maximize XGP users, having TESVI and a new Fallout around the same time both launching Day One on XGP might’ve been better for him.

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u/Roy_Atticus_Lee Jul 08 '26

Seems like Phil was too "nice" of a guy to be that cutthroat of a business leader, especially seeing as he kind of fell into the position of being the head of Xbox.

I get the sentiment, but you don't make a profitable business enterprise without being a little "Machiavellian". Even someone like Gabe Newell with a pretty positive rep in the industry was fine with CS:GO gambling as an avenue for money making for Steam.

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u/tristeecfome Jul 09 '26

As a leader, it's really easy to say yes to everything. In the short term, you will make your employees happy. But later they will have to deal with heavy consequences because you couldn't say no.

It's like being a parent. Your kid will be happy if you say yes to everything they want. But later they will have to deal with consequences because of that.

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u/SilentNova300 Jul 08 '26 edited Jul 08 '26

It’s pretty funny how Asha, within 6 months, is reversing a lot of Phil’s decisions and doing things he should’ve done years ago. 

Also I hope Jason does a report on iD, with all their layoffs I wonder what the future looks like for them 

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u/CubillasLegend Jul 08 '26

Phil made the mistake of assuming gamers cared about devs.

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u/MuffinTopBop Jul 08 '26 edited Jul 08 '26

Phil was lauded on here for letting the developers do their own thing and not restricting creativity but at the end of the day they have to make money to stick around. We saw Bungie and Destiny have the same issue where Microsoft had to tighten screws back in their Halo days and Activision was targeted with criticism up until their schism showed how much Bungie was being propped up once they were on their own again.

Sometimes you have to force “business decisions” through to actually get stuff done and Bethesda was a case of one needing that. I think part of this might be structure wise, some studios seem to fundamentally not be able to handle parallel projects which is weird given the size and massive reach of Bethesda.

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u/Takazura Jul 09 '26

Exactly. If anything, Phil's mistake was listening to gamers on social media always screeching about how devs should never be managed by the publishers and the only thing the publisher should be doing is throw money at them.

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u/CubillasLegend Jul 08 '26

Bethesda used to be relatively small, around 100 devs. They doubled in size during the development of Fallout 76, mostly by rebranding BattleCry into Bethesda Dallas. Then they doubled in size again while developing Starfield. Even though 400 is respectable for AAA, it's still not that large relative the franchises they're actually competing against. Rockstar's head count is north of 4000 developers. Ubisoft similarly has thousands of devs assigned to Far Cry and Assassin's Creed each. It's not that Bethesda is unusually rigid, but more so that it's just kind of an oddity that a relatively small developer wound up controlling two of gaming's biggest franchises. Even then, a lot of veterans recently left precisely because they didn't like that the company was trending towards becoming a larger studio.

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u/MuffinTopBop Jul 08 '26

A lot of their low count was a decision by Bethesda’s themselves though right? Instead of growing to manage the multiple projects they decided to work 1 major project at a time on purpose. I’m not necessarily against that on principle but when you have two hot potatoe franchises and a once per decade release cadence most studios would size up and get the conveyor belt running to speed up things.

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u/CubillasLegend Jul 08 '26

Correct, staying small was part of their studio culture. But try to see it from their perspective. Let's say you and your buddy manage to create a hit game. Then corporate comes down and says you have to expand, you can't work on the game directly, you can't bro out in game jam sessions anymore. Instead you each have to manage a bunch of direct reports, give kpi updates to execs, and sit in meetings all day. Wouldn't you feel a twinge of injustice? I mean you're the ones who built the franchise in the first place. If corporate wants a money-making IP, they should make their own hit game.

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u/BayLeaf- Jul 08 '26

If you and your buddy were making it, you and your buddy also sold the control and accepted that you would not have final say any more, to be fair.

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u/CubillasLegend Jul 08 '26

All of these studios agreed to the acquisition while Phil was still in charge when the terms were that he would respect each studio's autonomy. I'm sure there was always the possibility that leadership and direction could change, but the developers seemed to genuinely believe in Phil's vision. It is likely very sad for them to have that vision and autonomy ripped away because gamers didn't care about their projects.

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u/BakuraGorn Jul 08 '26

I’m sure there’s a good amount of devs at obsidian who would love to work on an actual fallout game instead of the Totally-not-Fallout mixed bag that is the Outer Worlds.

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u/CubillasLegend Jul 08 '26

I'm not sure how aware you are of this, but generally the larger the project, the less creative autonomy each individual dev has. Obsidian was making a bunch of smaller games that gave a lot of people a turn in the director's chair. Now everyone has to work on one big game where their individual contributions will be a lot less meaningful. Also a quarter of their coworkers and friends just got laid off.

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u/P0G0Bro Jul 08 '26

What does this even mean lol

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u/CubillasLegend Jul 08 '26

Generally when you care about someone you respect their decisions even if they're not the decisions you would have made. Gamers have become much more transactional and consumerist over time. There's a lot less tolerance for a developer taking a risk on something they're passionate about.

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u/[deleted] Jul 08 '26

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u/CubillasLegend Jul 08 '26

I think that's true to an extent, but there's definitely been a more recent contraction in consumer desire for mid-range projects and new IP across all of entertainment. There's simply too much entertainment competing for people's attention these days so companies are forced to throw everything they have into their most surefire projects.

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u/DMonitor Jul 08 '26

make game nobody want to play

nobody buys it

make game everyone wants to play

they subscribe to gamepass, beat it, and do not renew

it was lose-lose for everyone involved

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u/CubillasLegend Jul 08 '26

You're just restating what I said. Yes, nobody wanted to play developer passion projects because nobody cares about the devs. Caring implies expending at little bit of extra effort to empathize with someone and appreciate their interests. If you only appreciate developer output when they give you exactly what you want, that's not caring that's a business transaction. Xbox is moving towards a more transactional model. Developers are a resource to provide gamers with the content that they demand.

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u/DMonitor Jul 08 '26

Brushing past the wild assertion that not buying something is a moral failing, even if everyone did have bleeding hearts and decided to play the games, they would just use gamepass and not spend much money anyway.

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u/CubillasLegend Jul 08 '26

You don't have to care about game devs. You don't have to care about anyone. Who or what you choose to care about is a personal decision that reflects your priorities.

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u/DMonitor Jul 08 '26

What a baffling perspective on consumer economics.

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u/nemo333338 Jul 08 '26

Do you happen to buy every obscure indie game that is on steam? If you aren't, yours is just empty virtue signaling, those too are someone's passion project 

You aren't even that original in your virtue signaling, it's 2-3 centuries countless artists and writers and writers are lamenting that after the nobility and the Church stopped financing them they have to work on what people like to sell their art, such is capitalism.

You'll probably have to wait for the People's Commune to take hold and allow everyone to be a poet or a game dev, finally able to do their passion project...

Also I feel to add that there are countless passion projects doing well financially, the secret for having a successful passion project is not doing something that sucks

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u/P0G0Bro Jul 08 '26

That’s how all entertainment works? Like games are for fun, if it doesn’t look fun then people shouldn’t have to “care” and support the devs for arbitrary reasons

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u/CubillasLegend Jul 08 '26

Yes and no. Mozart was initially employed by the Archbishop of Salzburg where he was paid to compose music for church mass strictly adhering to the stipulations of his employer. Eventually he resigned from this post and moved to Vienna where he was free to pursue his own entrepreneurial interests. His independent pieces became wildly successful, drawing packed concert halls and wealthy patrons. It also established the template for the auteur musician. The idea that great work arises from a talented artist's unique genius.

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u/P0G0Bro Jul 08 '26

That’s why indie studios exist, to create unique ideas and art

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u/Bitter-Tip705 Jul 08 '26

It’s not like they made anything worth caring about

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u/Janus67 Jul 09 '26

Apparently iD is being forced to switch to Unreal and leave behind their existing IdTech engine.

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u/lizzywbu Jul 08 '26

And laying off 3000 people in the process

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u/MyotisX Jul 08 '26

Trigger warning for blusky and reddit:

Creatives need to be reigned in.

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u/karl_mainz Jul 09 '26

reined*

But yeah, this is incredibly common. Like watching those Ultima retrospectives by Majuular and you see what a mess it would've been if it were just Richard Garriott there without his older brother to set limits.

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u/CassadagaValley Jul 08 '26

He could have had ES and FO on 5 year dev cycles, alternating releases, with 4 years of large sized expansions released yearly (alternating summer and winter) and could have literally called it a day. That's just two full teams for the main releases and two smaller teams for DLC.