Microsoft’s September 22, 2026 reorganization of Xbox Game Studios put Obsidian Entertainment under Bethesda, and that could end up meaning a lot for Fallout players. Reports say Obsidian is working on a new Fallout, while Bethesda Game Studios is still only in early pre-production on Fallout 5.
The move lines up with a broader Xbox reset. Microsoft seems to be narrowing its focus to a smaller set of big franchises, including Fallout, The Elder Scrolls, and Diablo, rather than leaning as heavily on the semi-independent studio model that helped fuel Game Pass.
There’s other context here too: consolidation, layoffs, and changes affecting Halo and Forza. Seen against all that, shifting Obsidian under Bethesda looks like a clear signal about where Xbox wants to put its biggest RPG weight.
Obsidian Entertainment was founded in 2003 and bought by Microsoft in 2018. The studio made its name with Star Wars: Knights of the Old Republic II, Pillars of Eternity, The Outer Worlds, and Fallout: New Vegas.
Reports have also pointed to Fallout 3 and Fallout: New Vegas remasters. That would give players a steadier run of Fallout releases while the series keeps its mainstream momentum.
If you want more Fallout sooner, this is one to watch.
Matt Booty has said Obsidian Entertainment will keep supporting Grounded, but he didn’t say anything about Avowed or other original IP. Reports also suggest an Avowed sequel may have been sidelined or canceled.
You can keep up with these projects through Xbox, PC, and Bethesda’s official channels.
Author: Emmanuel Bosque
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