Avowed and The Outer Worlds developer Obsidian Entertainment is not in danger of closure, according to Bloomberg’s Jason Schreier.
Bloomberg investigative journalist Jason Schreier took to Bluesky and the ResetEra forums to comment on a report claiming that Obsidian Entertainment is in danger of closure, and that the studio is in the early phase of developing a Fallout project. According to his sources, this is not the case, as Xbox intends to keep The Outer Worlds and Avowed developer.
“Despite a report this morning, I can confirm that Obsidian is *not* in negotiations to avoid shutting down,” said Schreier on Bluesky. While he acknowledged that things will be clearer after the weekend, sources familiar with the matter told him that the studio will remain a part of Xbox Game Studios. “Plenty of details are still up in the air surrounding the layoffs (picture will be clear on Monday) but Xbox is keeping Obsidian, according to people familiar with the situation.”
Meanwhile, on the ResetEra forums, Schreier clarified that Obsidian Entertainment isn’t currently working on a new Fallout project, though he added that this may eventually end up being the case, based on Xbox CEO Asha Sharma’s reported new direction. “FWIW this isn’t true, although I suppose it could become true real soon given Sharma’s reported new direction,” he said.
Last month, Obsidian Entertainment co-founder Chris Avellone heard that Xbox first-party studios previously considered “safe” from layoffs had received a different message after the announcement of a business reset. The upper management at these studios reportedly told employees it wasn’t sure how the company’s restructuring would impact the development teams. According to him, there is a lot of uncertainty, even within first-party studios that have had a steady cadence of releases.
Of the projects in development at Obsidian Entertainment, Avellone believes Grounded 2 is heavily outsourced, and Avowed 2 is also using design outsourcing. According to him, the rest of the projects seem like they are ramping up, which is why they have a smaller staff at first. He didn’t identify any of them as a Fallout project.
