According to Bloomberg's Jason Schreier, Microsoft has canceled multiple Obsidian Entertainment projects to start to have the veteran RPG studio begin work on a new game in the Fallout franchise.

This comes in a turbulent time for Microsoft/Xbox. They recently shed four studios through sale or letting them revert back to being independent, on top of laying off 1600 employees with 1600 more planned over 2026-2027's fiscal year.

Obsidian was not immune to the layoffs either, with about a quarter of their team let go, per Schreier. 

Several of the projects were unannounced, but Schreier reports that one of them was a planned sequel to Avowed, a new RPG franchise that launched last year to moderate success.

Fans have been calling for Obsidian to return to Fallout for many years, as many fans argue their 2010 game Fallout: New Vegas is the best in the series. Unfortunately, this seems to have been at the expense of other games and franchises. Since New Vegas, Obsidian has launched several new franchises, such as Pillars of Eternity, The Outer Worlds, Grounded, Avowed, and others like the niche critical hit Pentiment.

Schreier also reports that Josh Sawyer has been tapped to lead the design of this new Fallout game. He has been a longtime RPG developer, first working at the legendary Black Isle Studios who produced some of the best RPGs of all time and created the Fallout series.

Sawyer has served as project lead on Fallout: New Vegas, the Pillars of Eternity games, and Pentiment. His relationship with the Fallout franchise goes back decades, having first helmed the original Fallout 3 game that was eventually canceled by Black Isle Studios.

The Fallout series has not seen a new game entry since Fallout 76 in 2018, and has not seen a new mainline entry since Fallout 4 in 2015. The planned scope or what this Fallout game helmed by Sawyer is still not known.

Of course, this all comes off the heels of the very successful Fallout television show, which is now beginning to film its third season. The second season saw the franchise's return to New Vegas, the first since the game released in 2010.