Obsidian entertainment's future uncertain as microsoft cuts 3,200 staff

Microsoft's sweeping Xbox layoffs have sent shockwaves through the gaming industry, with Obsidian Entertainment's future projects sparking particular concern among staff.

Obsidian's 60-70 layoffs leave studio's pipeline in question

As part of Microsoft's most significant restructuring in Xbox history, 1,600 employees were cut immediately, with another 1,600 set to depart over the next year. Four studios are departing Xbox to new management, with one now in consultation over its future.

Obsidian, the first-person RPG specialist behind hits like Fallout: New Vegas and The Outer Worlds, saw around 60-70 staff members let go, including some veterans. The cuts have left the studio's pipeline in question, particularly given the commercial underperformance of its last two major releases, Avowed and The Outer Worlds 2.

Obsidian is currently working on the early access game Grounded 2 and The Outer Worlds 2 DLC, but has yet to announce a new title. With Microsoft prioritizing its biggest franchises, there are lingering questions over whether Obsidian could be repurposed to support new games or contribute to titles like Fallout or The Elder Scrolls.