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The boss of Bethesda has issued a memo to staff reassuring them that Obsidian Entertainment remains “distinct” despite being absorbed into the company as part of this week’s seismic Xbox studios reorganisation.
This week, Microsoft announced hundreds more layoffs as it gutted Halo Studios and handed the next mainline Halo game, Sea of Thieves developer Rare, and Age of Empires developer World's Edge to Activision. Meanwhile, Obsidian, the Microsoft-owned studio behind the likes of Grounded, The Outer Worlds, and Avowed, was made a part of Bethesda.
Obsidian, perhaps most famous for developing the much-loved Fallout: New Vegas, was confirmed to be working on a Fallout game in the wake of new Xbox boss Asha Sharma’s “reset” of Microsoft’s gaming business, which has seen nearly 2,000 staff cut in a bid for improved financial performance. More staff are set to lose their jobs over the course of the rest of the current financial year.
Bringing Obsidian into the Bethesda fold makes sense given it’s working on Fallout, but some had worried the move signalled an eventual relegation to Fallout support studio status. But in a memo to staff viewed by IGN, Bethesda boss Jill Braff insisted Obsidian would retain its leadership and identity, while confirming Bethesda Game Studios would “continue to lead the Fallout franchise.”
Here’s the memo in full:
Hi everyone,
Following the note from Matt, I wanted to share more on today’s news and what it means for our collective teams.
I’ve had the opportunity to get to know Feargus Urquhart and his team over the past six years, and I have great respect for what they’ve built. Obsidian has extraordinary creative talent, deep expertise, and a long history of creating memorable games and experiences. I’m looking forward to working more closely with them.
Today’s announcement is primarily a change in reporting structure. The creative identity and strengths that make Obsidian distinct will remain at the core of their studio and work.
Feargus and the Obsidian leadership team will continue to lead Obsidian, with the studio reporting to me. Bethesda Game Studios will continue to lead the Fallout franchise. Together, the teams will build on their longstanding relationship and the early work already underway on a new Fallout project, with more to share in the months ahead. This structure supports the franchise-led model we’ve been strengthening while keeping accountability for both the studio and the franchise clear.
I also recognize that employees across our studios, publishing, and business teams will have questions about what this means for our current priorities, roadmap, and responsibilities. To be clear, we’re not resetting our roadmap or asking teams to change what they’re focused on. We’ll take the time to understand how teams can best support one another, and where closer partnership can benefit our players and fans. We’ll continue communicating as we progress.
I’m looking forward to spending more time with the Obsidian team and building on the strong foundation already in place across our organizations.
Welcome Feargus and team – more soon!
Jill
There is of course a huge amount going on at Bethesda right now, with The Elder Scrolls 6 the focus. Fallout 5 is in pre-production. BGS has also confirmed Fallout 3 and Fallout: New Vegas remasters are in the works. No release windows are known for any of these games, nor Obsidian’s Fallout game.
Meanwhile, BGS has said Starfield "continues," although Bethesda stopped short of confirming a sequel is in the works.
The Xbox “reset” has left Xbox Game Studios a shadow of its former self, with a number of previously owned studios either independent, moved into Activision or Bethesda, or set for closure. Will Gears of War studio The Coalition, which suffered layoffs this week, Clockwork Revolution developer inXile, and Fable and Forza Horizon developer Playground eventually also end up at either Activision or Bethesda?
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