New Fallout Game
Obsidian and Bethesda are developing a new Fallout game amid major Xbox restructuring.
Anonymous
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Xbox said the 268 eliminated roles span Halo Studios, other first-party studios, and the Xbox Game Studios management and central-functions teams. The company said the restructuring is intended to align groups that already work closely together and concentrate publishing expertise.
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Obsidian had already lost about 25% of its staff in an earlier Xbox restructuring, a move reportedly linked to the cancellation of an Avowed sequel and the studio’s shift toward Fallout development.
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Fallout 76’s planned “Raven Rock” expansion is expected to add a new map region and tell a prequel story connected to Fallout 3, creating a deliberate nostalgic link to that game.
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The untitled Obsidian Fallout project may potentially build on material from “Project Michigan,” an earlier Obsidian game reportedly designed in a Fallout-like style before being canceled. This remains speculation, and there is no confirmation that assets or concepts will be reused.
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The restructuring also includes other major Xbox changes: Activision is set to develop the next Halo game, Ninja Theory may close, and Xbox’s two Forza studios are being merged into one.
Xbox is restructuring its game studios, placing Obsidian Entertainment under Bethesda's direct control as part of a broader overhaul that eliminates 268 jobs across first-party studios PC Gamer. Obsidian will continue developing Grounded and a new, unnamed Fallout game alongside Bethesda Game Studios, marking a major shift for the New Vegas developer after losing 25% of its staff in a previous Xbox restructuring Windows Central.
The untitled Fallout project is separate from Fallout 5, which remains in pre-production and won't release until after The Elder Scrolls VI. Meanwhile, Bethesda has also announced a Fallout 76 expansion called Raven Rock for 2027 and a 30th-anniversary celebration, signaling a major year ahead for the franchise Rock Paper Shotgun.
Obsidian Moves Into Bethesda's Orbit Amid Layoffs
The restructuring consolidates Xbox's scattered creative teams into tighter reporting lines. Obsidian now reports directly to Bethesda instead of Xbox Game Studios, placing two of gaming's biggest RPG studios under one roof PC Gamer. Bethesda has promised the Fallout: New Vegas developer will keep its "distinct creative identity," a reassurance that comes after years of creative turmoil Windows Central.
The 268 eliminated roles hit Halo Studios, other first-party teams, and Xbox's central management offices PC Gamer. Obsidian had already shed about 25% of its workforce months earlier when Xbox canceled its Avowed sequel and redirected the studio toward Fallout development Rock Paper Shotgun.
New Fallout Game Emerges From Obsidian-Bethesda Partnership
Details remain scarce on the new Fallout title Obsidian is building with Bethesda. No release date has been announced. Speculation suggests the project may build on "Project Michigan," an earlier Obsidian game designed in a Fallout-like style before cancellation PC Gamer. Any asset reuse remains unconfirmed.
This collaboration sits separate from Bethesda's own Fallout 5, currently in pre-production and scheduled after The Elder Scrolls VI launches Rock Paper Shotgun. Remasters of Fallout 3 and Fallout: New Vegas are also reportedly in development, giving fans multiple Fallout projects to anticipate Rock Paper Shotgun.
Fallout 76 Gets Nostalgic Expansion and Franchise Momentum
Bethesda is feeding franchise momentum with a Fallout 76 expansion called Raven Rock launching in 2027. The expansion adds a new map region and tells a prequel story tied to Fallout 3, deliberately building nostalgia for that classic game Rock Paper Shotgun. A live 30th-anniversary celebration will also mark the year, keeping the franchise in the spotlight.
Xbox's Broader Restructuring Reshuffles Multiple Franchises
The Obsidian move is one piece of a larger Xbox overhaul affecting multiple franchises. Activision is now developing the next Halo game, handing control away from Halo Studios. Ninja Theory faces potential closure. Xbox's two Forza studios are merging into a single team PC Gamer. The changes reflect Xbox's effort to align teams and consolidate publishing power.
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