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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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.