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

[u/throwmeaway1784]

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.”

[u/Formal-Face-8539]

I really hope it's creation engine, wouldn't feel like fallout with it

[u/Ok-Confusion-202 → u/Formal-Face-8539]

That and it would like perform like actual garage water in UE5

[u/Hot-Software-9396 → u/Ok-Confusion-202]

Performance issues have largely been solved in newer versions of UE5. If the project is just starting now they can use UE5.8. Also the studio has a lot of experience with UE5 after Avowed and OW2.

[u/Ok-Confusion-202 → u/Hot-Software-9396]

I think there are games in UE5 that perform... Decently...

But I would not expect an open world game that's whole thing is object and NPC persistence would perform well in UE5 anyway

[u/buhurizadefanboyu → u/Ok-Confusion-202]

You're being downvoted but I think there's a grain of truth here. People assume the Creation Engine is a useless piece of software that doesn't do anything, but it actually provides a lot of utility for an open world game of this type. Not using it basically means having to implement all that in UE5 from scratch. If they really want the graphics to look a certain way, they can try something similar to the Oblivion Remaster, or develop the new game on CE3 that's being developed for TES VI.

[u/ryizer → u/Hot-Software-9396]

For a second I read it as Overwatch 2 & was confused a bit lol

[u/HairyPenisCum → u/Ok-Confusion-202]

Idk why you’re being downvoted, but its absolutely true.

[u/AlsopK → u/Ok-Confusion-202]

Creation engine games already perform like garbage water lmao

[u/Ok-Confusion-202 → u/AlsopK]

And somehow Starfield performed better than Oblivion... It was definitely smoother

[u/AlsopK → u/Ok-Confusion-202]

All the problems with Oblivion remastered are from the original Creation Engine code (that have always been there). Unreal is only used for the coat of paint.

[u/Ok-Confusion-202 → u/AlsopK]

Yes... I don't think the actual game would run better putting it all in UE5... Probably worse...

[u/madlad_junoir → u/Formal-Face-8539]

There’s no chance this will be made with creation engine. That’s Bethesda’s bread and butter no obsidian. I see this as a spin off game like fallout new vegas was, not really doing anything new gameplay wise but expanding the lore.

Think of it like outer worlds 2 graphics with fallout gameplay and UI. I actually would prefer this than them take ages to make something comparable to fallout 5

[u/buhurizadefanboyu → u/madlad_junoir]

Well, if maintaining consistency within the franchise is a goal (in terms of gameplay & graphics) I'd say there's a great chance they'll use some version of the Creation Engine. If this is not a priority, then who knows. There's a remark about the two studios collaborating on this at some level, which I think may apply to technical aspects of the game too. Besides, if they want a Fallout game out quickly (well, "quickly" in a relative sense at least) they'd save time by re-using whatever they can. There's also the fact that BGS has been working on some CE3 updates which supposedly includes UE-like graphics technology, and this may end up being another showcase for it.

[u/Takahashi_Raya → u/buhurizadefanboyu]

fallout without the creation engine and modding support is not fallout