Obsidian Entertainment has shelved plans for Avowed 2, shifting resources toward an ambitious new Fallout title that will be led by Josh Sawyer, according to Bloomberg. The decision marks a significant pivot in the studio's roadmap as it contends with broader layoffs across Xbox Game Studios.
Sawyer, who directed the acclaimed Fallout: New Vegas, was previously overseeing a separate RPG project with structural similarities to the Fallout franchise. He will now helm the new Fallout game in partnership with Bethesda, which has stewarded the IP for nearly two decades. Bethesda will collaborate with Obsidian on the title.
A skeleton crew will remain assigned to Avowed 2, keeping the door open for revival if circumstances change. The cancellation comes as part of Microsoft's broader organizational overhaul, which has included significant staff reductions at Obsidian itself, with roughly a quarter of the studio affected by layoffs.
The shift reflects the gaming industry's current contraction, but it may offer a silver lining for franchise fans starved for new content. The mainline Fallout series has gone dormant since Fallout 4 in 2015, followed only by the multiplayer-focused Fallout 76. With Bethesda committed to The Elder Scrolls 6 for years to come, a single-player Fallout from that studio is unlikely anytime soon. The franchise received renewed attention through the critically acclaimed live-action series on Prime Video, which has intensified appetite for a fresh game installment.
Sawyer's track record makes the announcement potentially significant for Fallout enthusiasts. New Vegas remains the franchise's most beloved entry among players, demonstrating his ability to deliver a compelling Fallout experience even when working outside Bethesda's direct supervision. The new project signals that Microsoft sees veteran creative leadership as essential to reviving dormant franchises during a period of studio consolidation.
Author Emily Chen: "Obsidian returning to Fallout after nailing New Vegas is a no-brainer, even if it means sacrificing Avowed 2 in the process."
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