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Xbox cancels Avowed, redirects Obsidian to Fallout, lays off 1,600

7/12/2026

Summary

Xbox Cancels Avowed

Xbox redirected Obsidian to a Fallout title, cancelled the Avowed sequel and laid off staff.
Josh Sawyer, known for Fallout: New Vegas, will lead the Fallout project after the Avowed sequel was cancelled for missing Microsoft’s expectations.
Bethesda director Todd Howard confirmed Fallout 5 will follow The Elder Scrolls VI, which is two years away.
Xbox’s restructuring calls for 1,600 layoffs, five closures and a reduction of 3,600 employees by 2027.

Summary

Obsidian Revives Avowed2

The small Obsidian team continues developing Avowed 2 despite its cancellation, aiming to finish the sequel.
Avowed launched on February 2025 as a Day One Game Pass exclusive and earned strong critical praise and fan support.
After launch, the title received quality-of-life patches and a large anniversary-edition update timed with its PS5 release.
Jason Schreier reported the sequel is farther along than most would guess, which could lower completion costs.

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Xbox Cancels Avowed

Xbox redirected Obsidian to a Fallout title, cancelled the Avowed sequel and laid off staff.
Josh Sawyer, known for Fallout: New Vegas, will lead the Fallout project after the Avowed sequel was cancelled for missing Microsoft’s expectations.
Bethesda director Todd Howard confirmed Fallout 5 will follow The Elder Scrolls VI, which is two years away.
Xbox’s restructuring calls for 1,600 layoffs, five closures and a reduction of 3,600 employees by 2027.

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