Obsidian Entertainment has reportedly put Avowed 2 on hold while shifting development resources toward a new Fallout game as part of a strategic realignment inside Xbox, according to journalist Jason Schreier.
Avowed 2 development paused amid Xbox restructuring
Sources cited by Schreier say Avowed 2 had been progressing well and might have been announced next year, but the project no longer fits the direction set by Xbox’s new head, Asha Sharma. A smaller team will reportedly continue work on concepts tied to Avowed 2 to preserve assets and ideas should Microsoft choose to revive the project later.
“In the end, the project didn’t fit Asha Sharma’s overall strategy,” Schreier wrote, citing people familiar with the development.
The report comes days after another round of layoffs at Microsoft that affected about 25% of Obsidian Entertainment staff, according to employees and industry outlets.
Josh Sawyer is said to lead the new Fallout project
The report names Josh Sawyer, Obsidian’s design director and a key figure behind Fallout: New Vegas, as the lead on the new Fallout title. Prior to the strategic shift, Sawyer was reportedly directing an original RPG that shared structural and thematic traits with Fallout; that original IP project was allegedly canceled during the reorganization.
Other Obsidian projects remain in progress
Despite the reported cuts and cancellations, Obsidian is said to continue developing content for The Outer Worlds 2 and Grounded 2. The studio is reportedly working on DLCs and planned updates for both games.
It is not yet clear which other internal projects, if any, were ended as part of the restructuring.
Microsoft and Obsidian have not commented
Neither Microsoft nor Obsidian has provided an official comment on the Bloomberg report. Schreier is regarded as a reliable industry reporter, but the details remain categorized as rumors until confirmed by the companies.
If accurate, the changes would align with Xbox’s recent strategy to prioritize established franchises as the platform reorganizes its studios following layoffs and project cancellations in recent days.
