Microsoft's gaming division has reportedly approved a new Fallout game at Obsidian Entertainment. This marks a major shift in Xbox's strategy as the company restructures its studios. The reported decision comes alongside layoffs at Obsidian and the cancellation of several projects, including a planned sequel to Avowed.
As per a report by Jason Schreier of Bloomberg, Obsidian has been given the green light to make another Fallout game in the main series. The company is expected to handle the development while Bethesda Game Studios is working on The Elder Scrolls 6. It is said to be a long way from its release.
This decision may help in reducing the time between two Fallout games. The Fallout series has not received a mainline game for more than a decade. The franchise is now considered as important for Xbox as Halo, The Elder Scrolls, Doom, and Wolfenstein.
The Fallout project is reportedly moving forward as Obsidian undergoes key internal changes. Schreier reported that more than 50 employees have been laid off from the studio, representing roughly a quarter of its workforce. The report also said Xbox has canceled a planned sequel to Avowed, along with several unannounced projects.
Sources cited by Schreier claimed the Avowed sequel had progressed well and was expected to be revealed within the next year. The sequel was reportedly dropped after it did not align with Xbox CEO Asha Sharma's broader plans for the gaming division.
The reported Fallout project is expected to be led by Obsidian studio design director Josh Sawyer. He previously directed Fallout: New Vegas, one of the franchise's most acclaimed titles. The report did not reveal the scope of the new game. It is unclear whether the project will serve as a follow-up to New Vegas or become a full-fledged Fallout 5.
Some developers are reportedly continuing work on the canceled Avowed sequel until Fallout development reaches full production. According to Schreier's sources, a section of the team still hopes the project could return in the future.
The reported changes reflect Xbox's renewed focus on its largest gaming franchises. Fallout now appears to have moved higher on that list, even as the restructuring has affected ongoing projects and staffing at Obsidian.
The reported decision shows that Xbox wants to accelerate one of its most valuable franchises, even as the wider changes inside its studios continue to reshape development priorities.
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