Microsoft’s Xbox reset is pivoting Obsidian to make Fallout instead of Avowed

What happened

According to The Verge’s linked source, Microsoft’s Xbox reset is pivoting Obsidian to make Fallout instead of Avowed, As part of Microsoft’s big Xbox “reset,” which includes layoffs affecting 3,200 staffers, jettisoning studios, and shifting investments to focus on “higher priority projects,” Obsidian Entertainment is changing its plans. The studio, behind games like Grounded and The Outer Worlds, is starting work on a new Fallout title and has canceled “multiple projects,” including a […] As part of Microsoft’s big Xbox “reset,” which includes layoffs affecting 3,200 staffers, jettisoning studios, and shifting investments to focus on “higher priority projects,” Obsidian Entertainment is changing its plans. The studio, behind games like Grounded and The Outer Worlds , is starting work on a new Fallout title and has canceled “multiple projects,” including a sequel to last year’s Avowed , according to Bloomberg . Despite the success of the Fallout TV show , which is getting a third season , Xbox has

Context

The development sits in VINI’s Technology coverage for readers following technology, science, product policy, markets, infrastructure, and the public consequences of innovation. The original report is linked so readers can check the publisher account, follow later updates, and compare new coverage against the first published record. The original item is dated 2026-07-08T18:50:27+00:00.

What to watch

Open questions include whether primary sources issue follow-up statements, whether local or market impacts become clearer, and whether additional reporting changes the timeline or adds material context.

Source

Primary source: Microsoft’s Xbox reset is pivoting Obsidian to make Fallout instead of Avowed via The Verge. VINI cites and links the source; it does not reproduce the publisher’s full article text without rights clearance.