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Xbox Reportedly Cancels Avowed Sequel to Make Room for a New Fallout Game From the New Vegas Director

The move follows 1,600 Xbox layoffs and a shift toward games that can sell copies, Game Pass subscriptions or consoles, Bloomberg reported.

  • Xbox-owned developer Obsidian has cancelled a sequel to Avowed, shifting resources to develop a new Fallout game under the direction of Fallout New Vegas director Josh Sawyer.
  • This development follows deep cuts at Xbox, which slashed 1,600 jobs this week as part of a long-term turnaround strategy to prioritize games that sell.
  • The Fallout franchise remains more popular than ever following the Amazon Prime Fallout TV series, though industry conditions have changed significantly since the 18-month development cycle of Fallout New Vegas 17 years ago.
  • Xbox is entering a "common sense" era, reversing an earlier 50% price hike on Game Pass that caused a loss of subscribers.
  • Bethesda does not plan to release a new mainline Fallout entry until well into the 2030s, leaving Obsidian's project as a near-term alternative in the franchise roadmap.
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Forbes broke the news in United States on Wednesday, July 8, 2026.
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