Tree species
Xbox has tasked Obsidian Entertainment with making a new Fallout game, according to Bloomberg. This comes after a major “reset” of Xbox that saw 1,600 employees let go this week, including roughly 25 per cent of Obsidian’s workforce. Obsidian is best known for making 2010’s beloved Fallout: New Vegas. Notably, Bloomberg reports that Obsidian cancelled a sequel to last year’s acclaimed Avowed, as well as other unannounced projects, including a new RPG inspired by Fallout from studio design director Josh Sawyer, who helmed New Vegas and Pentiment. Sawyer is now spearheading a team on a new Fallout, while others at Obsidian will continue to work on The Outer Worlds 2 DLC and Grounded 2, the latter of which is co-developed with Eidos Montreal. Either way, this news is unfortunately much bigger than Obsidian. After years of declining Xbox sales, including Xbox Game Pass missing subscriber targets by tens of millions, the brand is undergoing a major restructuring under new Xbox boss Asha Sharma.
Despite the fact that Microsoft still invests hundreds of billions in AI with next to no return on investment, the company is once again cutting down Xbox, even after acquiring many studios, including spending US$69 billion to acquire Activision Blizzard. This week’s 1,600 layoffs includes the divestiture of four studios, including Montreal’s Compulsion (South of Midnight), as well as major reductions across other teams like Obsidian, Zenimax Online Studios (The Elder Scrolls Online) and id Software (Doom). Microsoft is also planning another 1,600 layoffs across Xbox over the next 12 months, leaving remaining employees who are still grappling with the impact of this restructuring to be expected to carry on while actively worrying about their own jobs.
It should also be noted that Microsoft still has incredibly ambitious targets for Xbox that will now be even more unrealistic with these smaller, battered and bruised teams. In particular, the company says it wants to reach one billion people a day with Xbox, versus the one billion it currently reaches annually. This figure would simply be unattainable even if you factor in multiplatform titles like Minecraft, mobile games like Candy Crush and media like the Fallout TV series.
At the same time, the tech giant wants to return to Xbox console exclusives like Gears of War: E-Day from Vancouver’s The Coalition, a move that would run counter to reaching as many people as possible. In her goal of prioritizing bigger franchises like Call of Duty, Minecraft, Halo and Fallout, Sharma also reportedly wants to make games more quickly. But of course, it’s not possible to simply tell a studio like Obsidian to speed up development on a massive, complex game like Fallout. Presumably, she also wants to capitalize on Prime Video’s popular Fallout series, but at the rate big RPGs can take to make (sometimes as much as five to seven years), there’s not even any indication that the show would still be going at that point. The rare times that massive RPGs can be made in around three years, like 2027’s Final Fantasy VII Revelation , are generally attributed to the vast majority of studios being kept together between projects to build on their shared knowledge and teamwork.
But after losing a quarter of its staff, that’s likely just not possible for those who remain at Obsidian who are making a new Fallout.
All of this to say it’s sadly a huge mess at Xbox right now, and all of its developers — those who were laid off and those who remain — deserved much better. MobileSyrup may earn a commission from purchases made via our links, which helps fund the journalism we provide free on our website.
These links do not influence our editorial content. Support us here.