Obsidian's New Fallout Game Still on Track as Studio Joins Bethesda

Did you hear the latest shake-up at Xbox? In the midst of layoffs and restructuring, Obsidian Entertainment—the studio behind RPGs like The Outer Worlds and Pillars of Eternity—is now operating under Bethesda Softworks. But here's the good news: that new Fallout game you've been hoping for is still happening.

On September 22, Matt Booty, Xbox's chief content officer and executive vice president, posted on Xbox Wire about a new structure that brings Obsidian into the Bethesda business unit. "Bethesda will expand its remit to include Obsidian, which will continue its current projects, including Grounded, as well as the new Fallout project made in collaboration with Bethesda Game Studios," Booty wrote. So don't panic—this isn't Bethesda swallowing Obsidian whole. It sounds more like the working relationship Bethesda's parent company, ZeniMax Media, has with id Software, the makers of Doom.

Still, it's been a rough year for Obsidian. Back in July, the studio lost 25% of its staff after Xbox's first major reset. That led to the cancellation of an Avowed sequel and a shift in focus toward the Fallout franchise. The new Fallout game is now in development, though it's unclear if it's Fallout 5 or a spin-off. Either way, with this project and others, there are at least three Fallout games cooking right now.

But wait, there's more. Booty also announced that Activision will develop the next Halo, Hellblade developer Ninja Theory will likely close, and the two Forza studios have merged into one. And unfortunately, more layoffs are reportedly planned before June 2027. It's a turbulent time for Xbox, but at least Fallout fans have something to look forward to.

What do you think about Obsidian moving under Bethesda? Are you excited for a new Fallout game from them? Let us know in the comments!