Microsoft’s Xbox reset is pivoting Obsidian to make Fallout instead of Avowed
Josh Sawyer, the director of Fallout: New Vegas, is reportedly heading up the new game.
by Jay Peters
Jul 8, 2026, 6:50 PM UTC
Image: Bethesda Softworks
Jay Peters is a senior reporter covering technology, gaming, and more. He joined The Verge in 2019 after nearly two years at Techmeme.
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 hasn’t released a new game in the series since 2018’s Fallout 76. Josh Sawyer, Obsidian’s studio...
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