The big wave of layoffs also affects one of the most popular first-party studios at Xbox, Obsidian Entertainment. It seems that so many people will have to pack their things that the future of various planned projects is uncertain.
What is happening at Obsidian? According to a report from Kotaku, Obsidian Entertainment will not be sold or closed as part of the major layoffs at Xbox, but about 60 to 70 employees are expected to lose their jobs – that would affect about 25 percent of the entire workforce.
Those affected are said to include creatives from all areas, such as producers, artists, designers, programmers, QA testers, and writers – among them many experienced developers who have worked for Obsidian for over 10 years.
The anonymous sources at Kotaku explain that there is now uncertainty about how to implement the huge list of planned projects after the layoffs. The only thing that seems clear is that work on the early access version of Grounded 2 and the DLCs for The Outer Worlds 2 will continue.
As a big RPG fan, Karsten has followed Obsidian’s work since their debut with Star Wars: Knights of the Old Republic 2. He considers New Vegas to be the best Fallout. Alpha Protocol was an underrated gem. Tyranny and Pillars of Eternity 2 are likely two of the best old-school RPGs of the past decade. He also had fun with Avowed and both The Outer Worlds.
What does Obsidian stand for? The studio was founded in 2003 by former veterans of Black Isle Studios (Fallout, Fallout 2, Planescape: Torment, Icewind Dale) and has remained true to its role-playing roots to this day. Here are just a few highlights that Obsidian has released over the past 22 years and that I have enjoyed over the years:
- Star Wars: Knights of the Old Republic 2
- Neverwinter Nights 2
- Fallout: New Vegas
- South Park: The Stick of Truth
- Pillars of Eternity plus Part 2 and Avowed
- Tyranny
- The Outer Worlds plus Part 2
- Grounded
- Pentiment
Since 2018, Obsidian has been part of Xbox’s first-party studios. Unfortunately, the sales figures for Avowed and The Outer Worlds 2 have fallen short of expectations, even though I feel they have noticeably enriched the Xbox Game Pass.
So much wasted potential
What do the layoffs mean? Since the acquisition of Bethesda, countless Fallout fans have been looking to Microsoft and wondering: Why aren’t you letting Obsidian make a sequel to their fantastic Fallout: New Vegas?
Many claim that the Obsidian installment is the best game in the series. Colleagues from GameStar ranked Fallout: New Vegas at number 1. On Steam, the game has a strong 95 percent positive rating. A sequel should sell like hotcakes, especially considering that Fallout 4 by Bethesda is already eleven years old.
With the layoffs now planned, a large open-world Fallout for Obsidian seems hardly manageable in the future. At least, that is my fear.
It just makes me angry how incredibly much expertise and great brands Microsoft had after all the acquisitions and how little they have made out of it. This includes what has been happening at ZeniMax since 2025: One of the last major MMO studios from the West is teetering on the brink and it breaks my heart
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