Obsidian is reportedly making a new Fallout game, with Avowed sequel cancelled to make way

Xbox has reportedly shifted Obsidian Entertainment onto a new Fallout game led by Josh Sawyer, the director of Fallout: New Vegas, according to a Bloomberg report published today. The move comes in the wake of the studio losing around 25% of its workforce in this week's Xbox layoffs, with an Avowed sequel cancelled to free up resources for the project.

The details:

• Bloomberg reports that Microsoft has tasked Obsidian with developing a new Fallout game, with the project being led by Josh Sawyer, who directed Fallout: New Vegas back in 2010.
• The game will be developed in collaboration with Bethesda, the current custodian of the Fallout franchise.
• Xbox cancelled an Avowed sequel to redirect Obsidian's focus toward the Fallout project. Both Avowed and The Outer Worlds 2 reportedly underperformed sales expectations.
• Obsidian lost roughly a quarter of its staff in the broader Xbox layoffs announced on July 6, which affected more than 3,200 employees across Microsoft's gaming division.
• The project is still described as being in early stages and in flux, with few specific details about the game itself confirmed at this time.
• The new Fallout title would mark Obsidian's return to the franchise for the first time since New Vegas, which remains widely considered one of the best entries in the series.