Fallout: Obsidian Shifts to New Game, Avowed 2 Canceled by Xbox

Microsoft has decided to put Obsidian Entertainment, one of its premier studios, to work on a fresh installment of the Fallout series. This news, reported by Bloomberg on July 8, 2026, has already sparked quite a debate among fans.

This move is a clear signal of where Redmond wants to place its bets. Fallout is a massive brand, boasting millions of dedicated players worldwide. Handing the reins to a capable RPG studio like Obsidian definitely raises hopes for something truly spectacular. Microsoft reallocated its Obsidian Entertainment studio to develop a new Fallout video game, as reported by Bloomberg on July 8, 2026.

Unfortunately for some fans, this studio reshuffle comes with a price. The sequel to Avowed, the role-playing game released last year, has been officially canceled. It was an anticipated project, but it's now relegated to Xbox's forgotten plans.

It's not the first time we've seen such drastic changes in the video game industry. Big companies often prefer to invest in franchises with a more secure financial return. Avowed, despite a decent launch, evidently didn't fully convince them.

Sure, there's a bit of a bitter taste left. Imagine waiting for a sequel only to see it vanish. But then again, who can say no to a new Fallout? Xbox has clearly picked its priority, and they seem to have had no doubts. The sequel to the video game Avowed, which launched last year, has been officially canceled following Xbox's studio reorganization.