Obsidian Cancels Avowed 2 to Build a New Fallout With Josh Sawyer
The abrupt cancellation of Avowed 2 marks a profound shift for Obsidian Entertainment, as the studio abandons its fantasy sequel to spearhead development on a new Fallout game.
Key Takeaways
- Obsidian Entertainment has canceled the unannounced Avowed 2 sequel to redirect its focus entirely toward a new Fallout project.
- Veteran director Josh Sawyer is set to lead the new Fallout game, utilizing staff reallocated from the canceled fantasy project.
- The decision stems from a strategic restructuring under Xbox leadership to prioritize established legacy franchises over newer, unproven IPs.
Under a broad restructuring initiative led by Xbox CEO Asha Sharma, Microsoft is prioritizing established legacy franchises over expanding newer properties. The cancellation of the Avowed sequel directly fuels this new strategy, reallocating Obsidian’s remaining workforce to the Fallout universe.
According to a Bloomberg report by Jason Schreier, progress on Avowed 2 was actually ‘going well’ and aimed for an announcement within the next year, but was scrapped to align with new Xbox CEO Asha Sharma’s broader strategy.
Why Was Avowed 2 Canceled by Xbox?
Avowed 2 was officially canceled as part of a significant strategic pivot under new Xbox leadership. The decision was driven by a mandate to consolidate resources around proven blockbuster properties rather than unproven sequels, ensuring the output of core franchises is maximized.
Following a series of layoffs that reduced Obsidian Entertainment’s workforce by roughly 25%, confirmed by a California WARN Act notice affecting 52 employees, Xbox management reevaluated the studio’s development roadmap.
The original Avowed did not meet the commercial thresholds required to justify an immediate follow-up. This cancellation aligns with a broader directive across Microsoft’s first-party ecosystem.
What Do We Know About the New Obsidian Fallout Game?
Obsidian Entertainment is returning to the Fallout universe with a brand-new project led by veteran design director Josh Sawyer.
Sawyer, celebrated for his foundational work on Fallout: New Vegas, will lead the project, which is currently in the earliest stages of development.
The core team is being assembled from the remnants of the Avowed 2 staff alongside other internal divisions.
The Bottom Line: Microsoft’s Shifting First-Party Strategy
The cancellation of Avowed 2 and the sudden transition to Fallout underscore a critical restructuring of Microsoft’s internal studios. Xbox Series X|S and PC players are witnessing a distinct shift toward reliable, established IP.
While the loss of a dedicated fantasy RPG sequel is a blow to the Pillars of Eternity universe, the prospect of a new Obsidian-led Fallout game has generated substantial interest.
Fueled by a passion for gaming and the ever-evolving world of gaming news, Daniel loves connecting with seasoned and new players to bring games to life on the page, exploring their narratives and gaming trends. A self-published fiction and fantasy author, Daniel has nearly 20 years of experience writing gaming news and a love for storytelling that drives his enthusiasm to deliver breaking news, in-depth analysis, and industry innovations. You will find him in-game as "Windfell."
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