With a familiar face leading the project, the possibility of a sequel to their 2010 game finally coming to fruition at the Microsoft studio is not out of the question.

Obsidian Entertainment is one of the Xbox studios most affected by the latest wave of layoffs. Kotaku previously reported that approximately 25% of the employees at the Irvine-based studio were laid off, and this figure has now been confirmed by two reliable sources. Jason Schreier of Bloomberg and Stephen Totilo of Game File. According to a California WARN (Worker Adjustment and Retraining Notification) notice, 52 Obsidian employees were laid off.

However, the studio has not closed. According to Schreier, the studio is undergoing a restructuring compared to previous plans. Last November, Chris Avellone, a former Obsidian founder, revealed that the company was working on an Avowed sequel set for release in 2025 while putting The Outer Worlds project on hold. Now, however, after Xbox CEO Asha Sharma directed funding toward the biggest franchises, Avowed 2 has reportedly been canceled, and a new Fallout game will take priority. Josh Sawyer, the game director of Fallout: New Vegas, will lead this project.

After Fallout: New Vegas, Sawyer led the development of Pillars of Eternity and Pillars of Eternity II: Deadfire, then admitted he was burned out. He then began developing the quirky adventure game Pentiment. According to Jason Schreier, Sawyer had already started working on a new RPG project similar to Fallout, but not part of the franchise. Clearly, in light of this new directive from upper management, that is no longer acceptable. It comes as no surprise that Sharma is bringing in Obsidian to develop a new Fallout game, but it’s unfortunate that this is happening at the expense of Avowed 2. I loved the first game and think it would have been worth developing further.

It wouldn’t be surprising if Sharma also tasked Obsidian with developing a new Elder Scrolls game in the future. This is Bethesda’s other major series. With the exception of The Elder Scrolls Online, it hasn’t received a new installment since The Elder Scrolls V: Skyrim was released in 2011.

Source: WCCFTech, Game File, Bloomberg