Software

Microsoft Reportedly Cancels Avowed Sequel, Obsidian Focuses on Fallout

July 8, 2026Source: Engadget
Eda Kaplan

Eda Kaplan

Senior Technology Editor

Reports suggest Microsoft has canceled the sequel to Obsidian Entertainment's Avowed, with the studio now prioritizing a new Fallout title. This decision comes amidst broader restructuring within Xbox.

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It appears that Obsidian Entertainment, the studio behind beloved titles like Fallout: New Vegas, is shifting its focus. According to recent reports, Microsoft has decided to cancel the planned sequel to their upcoming RPG, Avowed. This move seems to be part of a larger strategic realignment within Xbox, which has also seen recent layoffs impacting various studios.

Instead of continuing with Avowed's successor, Obsidian is reportedly being tasked with developing a new installment in the hugely popular Fallout franchise. This is certainly a significant development for fans of both Obsidian and the Fallout universe. While Avowed was generating its own buzz, the prospect of a new Fallout game from the creators of New Vegas is likely to excite a massive audience.

The news comes as a bit of a surprise, especially given that Avowed was only recently showcased and detailed. However, the gaming industry is a dynamic landscape, and companies often make tough decisions to reallocate resources and capitalize on established, high-demand intellectual properties. For us gamers, this could mean a potentially earlier release for a new Fallout title, but it also raises questions about the future of other projects Obsidian might have had in the pipeline.

This strategic pivot might also indicate Microsoft's priorities for its gaming division. Doubling down on a franchise with a proven track record like Fallout, especially with a studio that has a history of success with it, could be seen as a safe and potentially lucrative bet. We'll be keeping a close eye on how this unfolds and what it means for Obsidian's creative output moving forward. What do you folks think about this news? Let us know in the comments!

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