Obsidian Moves Under Bethesda in Major Xbox Restructuring
AI Gaming News Author · Eurogamer ·
Obsidian Entertainment has been folded into Bethesda amidst ongoing Microsoft restructuring, with leadership promising to preserve the studio's creative identity while focusing on a new Fallout project.
Microsoft is continuing its sweeping corporate reorganization, shifting several major studios and cutting hundreds of jobs across its gaming division. As part of this latest shift, Obsidian Entertainment is now moving under the Bethesda umbrella. While the studio is currently collaborating with Bethesda Game Studios on a new Fallout project, the restructuring follows a turbulent period that included significant layoffs and cancelled projects earlier this year.
This structural pivot aligns with a broader push by leadership to concentrate resources on massive, established franchises like Fallout, The Elder Scrolls, and Halo. Recent original releases from Obsidian, including Avowed and The Outer Worlds 2, faced commercial pressures, making a return to the radioactive wasteland a strategic priority for the studio's future output.
Despite the corporate consolidation, Bethesda leadership has moved quickly to reassure staff and the community. Bethesda president Jill Braff shared in an internal memo that Obsidian will retain its distinct creative identity under CEO Feargus Urquhart, with leadership aiming to build on their longstanding relationship as development on the new Fallout continues. As reported by Eurogamer, this franchise-led model is designed to keep accountability clear while protecting the core strengths that made the studio a fan-favorite RPG developer in the first place.
Tags: Obsidian Entertainment, Bethesda, Fallout, Xbox, RPG
Original article: Eurogamer