Obsidian is reportedly making a new Fallout game headed by Josh Sawyer after Microsoft pulled the plug on an Avowed sequel

A Bloomberg report says Obsidian Entertainment, which was recently hit hard by mass layoffs at Xbox, has cancelled projects including a sequel to Avowed and will instead begin working on a new Fallout game.

A California WARN report shared by GameFile says 52 employees at Obsidian were let go in the layoffs, which Bloomberg says represents roughly a quarter of the studio’s workforce. The sequel to Avowed, the outstanding 2025 first-person RPG set in the studio’s Pillars of Eternity universe, is one of multiple unannounced games in development that have been cancelled amidst the bloodletting.

Instead of that, a new Fallout game is reportedly being headed up by Obsidian design director Josh Sawyer. Sawyer has an enviable record of RPG credits to his name, most notably in this moment as the lead designer and director of Fallout: New Vegas.

Still, I’ll be the first to say it, in this story at least: This sucks. I’m as down for a new Fallout as much as the next guy, but I could also really go for more Pillars, or whatever non-Fallout RPG Sawyer was reportedly directing before his attention was diverted to this.

I also can’t help wondering how the circumstances will impact what ultimately comes out of this. Sawyer has previously said he’d head up a new Fallout game if Microsoft asked, if he could do it on his own terms, but I doubt his terms would ever have included seeing a quarter of the studio put out of work, or that the mood among those who remain is going to contribute positively to the project.

I’ve reached out to Obsidian for comment on the report and will update if I receive a reply. In the meantime, if you want to see what Sawyer and Obsidian can do when they don’t have shareholder-obsessed overlords breathing down their necks, I would urge you to check out Pentiment, an astonishingly good slow-burn journey through 16th century Bavaria. It’s currently on sale for $10/£7.49/€10—that’s half-price—in the Steam Summer Sale. (Also, a bit of advice: Don’t spoil it for yourself.)

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