Obsidian Entertainment has reportedly cancelled a planned sequel to Avowed as part of a wider restructuring at the Xbox-owned studio, according to a report from Bloomberg. The report also claims the developer is shifting its focus towards a new Fallout game led by studio design director Josh Sawyer.
Bloomberg, citing people familiar with the matter, reports that Obsidian has laid off around a quarter of its workforce and cancelled multiple projects, including a sequel to the 2025 role-playing game Avowed. The report says the studio’s plans are part of a broader restructuring across Microsoft’s Xbox division.
According to Bloomberg, Sawyer will now lead a new entry in the Fallout franchise. The report notes that the strategy remains in flux and could still change. Sawyer had previously been directing a role-playing game that reportedly shared structural and thematic similarities with Fallout but was not part of the franchise.
The report contradicts comments made earlier by former Obsidian co-founder Chris Avellone, who suggested that an Avowed sequel was already well into development despite Microsoft’s recent layoffs.
Responding to discussion on social media, Avellone wrote, “Actually, that was one pipeline reason not to do it,” after claims that layoffs were expected following the releases of Avowed and The Outer Worlds 2.
When another user questioned his remarks, Avellone clarified, “To clarify, I said ‘pipeline,’ and that’s all I said.”
He then added, “Also, I’m betting Avowed 2 wasn’t canceled, it’s too far along.”
Bloomberg’s report now suggests that the sequel has been cancelled as part of Obsidian’s restructuring, although neither Microsoft nor Obsidian has publicly confirmed the reported changes.
