Here is a sentence I never expected to write in 2026: Obsidian Entertainment is officially making a new Fallout game. Josh Sawyer, the director behind the beloved New Vegas, is back at the helm. On paper, this is the dream scenario every Fallout fan has been begging for over the past fifteen years.
So why does it feel so wrong?
Because this announcement arrives wrapped in Microsoft’s latest round of devastating layoffs across the Xbox division. We are talking roughly 1,600 people cut from studios all over the map. Double Fine, Arkane, Ninja Theory, Undead Labs, Compulsion Games, id Software, and a whole lot more. The axe came down hard, and the ripples are still spreading.
Obsidian itself lost about a quarter of its staff in the process. Projects that were in the pipeline, including an Avowed sequel and at least one unannounced RPG that was reportedly structurally and thematically similar to Fallout, have been shelved. The studio is being redirected, full stop. This is not a case of a team eagerly pitching a passion project to an receptive publisher. It is a directive from above, handed down alongside pink slips for dozens of talented developers who will not be around to see it through.
Microsoft CEO Asha Sharma has made it clear that the company wants to double down on proven franchises. Fallout prints money, especially after the success of the TV adaptation on Amazon. From a pure business angle, putting Obsidian on a new Fallout entry is arguably the safest, most lucrative move on the table. It is also the least surprising one.
The real gut punch is the context. Sawyer was apparently working on something original at Obsidian, something that shared DNA with Fallout but was not actually a Fallout game. That project is gone now. Replaced by the very franchise it was inspired by. It is a strange loop, and not a comfortable one.
None of this means the resulting game will be bad. Quite the opposite. Obsidian has some of the sharpest RPG minds in the industry, and Sawyer’s track record speaks for itself. If anyone can deliver a worthy successor to New Vegas, it is this team. They will almost certainly pour everything they have into it, because that is what talented developers do, even when the circumstances around them are less than ideal.
But there is a difference between a studio choosing to revisit a beloved property because they have a fresh, exciting vision for it, and a studio being told to go make the thing that sells while watching their colleagues walk out the door. Those are two very different stories, and the gaming community is not going to forget which one this is.
For now, Fallout fans can be cautiously optimistic. Obsidian at the wheel of a new entry in the wasteland is genuinely exciting news, and at some point, when the dust settles and the shock of the layoffs begins to fade, the conversation will eventually shift to what this new game actually looks like. When that day comes, I suspect a lot of people will be eager to see what Sawyer and his remaining team can cook up. The talent is unquestionably there.
It is just a shame that getting here had to cost so many people their jobs.
Jordan Hayes is a staff writer at SteamGamer.net covering PC gaming news, hardware, and the latest from the Steam ecosystem. When not writing, Jordan is probably buried in a roguelike or arguing about GPU prices.
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