New Fallout game in development by makers of New Vegas but at a cost

After laying off a quarter of Obsidian’s workforce, Xbox has done what it should’ve done years ago and commissioned the studio to make a new Fallout.

Many fans credit Fallout: New Vegas as being the best entry in the series, even though it was made by Obsidian Entertainment and not Bethesda. So, when Microsoft acquired Bethesda and the Fallout IP in 2021, you’d think one of the first things it would do is get Obsidian, who they also own, working on New Vegas 2 or at least a remaster of the original.

And yet that’s not what happened, and while Obsidian has been consistently turning out solid games under Microsoft, none of them were big sellers. Of the three games Obsidian released last year, only Grounded 2’s early access launch was deemed a success by Microsoft.

It’s only now that Xbox has realised it would be a smart idea to let the New Vegas studio work on Fallout again, but only after it laid off roughly 3,200 people, including many of Obsidian’s staff.

At one point, Obsidian was reported to be working on at least four projects, including a sequel to last year’s Avowed, but it seems most, if not all of them, have been cancelled in favour of a new Fallout game.

This is per a new Bloomberg report and while there’s nothing to suggest it’s New Vegas 2, development is being led by Josh Sawyer, who was project director and lead designer on Fallout: New Vegas.

Interestingly, Bloomberg adds that Sawyer was previously directing a different role-playing game that was similar to Fallout but not explicitly part of the franchise.

Former Obsidian designer Chris Avellone commented on this on X, claiming that he heard Sawyer’s game was actually meant to be a Fallout game but ‘Bethesda put the kibosh on that.’

If true, this doesn’t help the perception that Bethesda is jealous that the Fallout game credited as the best in the series came from a different studio; a sentiment among fans that has persisted ever since New Vegas launched in 2010.

It’s very likely Sawyer’s new Fallout will be what he originally intended to make anyway, as Microsoft overrides Bethesda.

This would explain why VGC’s Jordan Middler claimed Obsidian was already in the early stages of a Fallout project last week, only for Bloomberg’s Jason Schreier to say this wasn’t true.

At the very least, it lines up with Xbox boss Asha Sharma’s decision to prioritise the company’s core franchises but if Obsidian’s only now starting it, then the game’s not going to be ready for several more years, especially if it’s a proper role-playing game and not a smaller spin-off.

Assuming Xbox doesn’t change its mind again, it should be out before Fallout 5, since Bethesda is still prioritising The Elder Scrolls 6, which reportedly won’t be out until 2028 at the absolute earliest.

Xbox is likely banking on riding the continued popularity of Amazon’s Fallout TV show, which is in the process of making a third season, but there’s no guarantee it will still be airing by the time Obsidian’s Fallout game launches, let alone Bethesda’s.

Obsidian making a new Fallout should be welcome news, but it’s undercut by the fact that Xbox has decided to hand such a key project to Obsidian after it cut a quarter of its staff, estimated to be about 60 to 70 employees.

Additionally, Obsidian is still expected to work on two DLC expansions for The Outer Worlds 2 and the full launch of Grounded 2, although there’s a good chance the former may now be cancelled.

According to Bloomberg, some employees are apparently continuing their work on Avowed 2 despite its cancellation. It’s believed the sequel could be made in a shorter timeframe and is far enough along that it could’ve been announced this year, so there’s some hope among the team it can be revived later down the line.

If all Xbox cares about are the heavy hitters like Fallout, though, it’s extremely unlikely Obsidian will ever be allowed to take time on anything else, especially smaller games like Pentiment – despite it being one of the most critically acclaimed Xbox exclusives of this generation.

Email gamecentral@metro.co.uk, leave a comment below, follow us on Twitter.

To submit Inbox letters and Reader’s Features more easily, without the need to send an email, just use our Submit Stuff page here.

For more stories like this, check our Gaming page.