Bethesda Boss Reassures Staff: Obsidian Stays Distinct After Xbox Shake-Up

Bethesda's Jill Braff tells staff Obsidian will keep its creative identity and leadership after being folded into Bethesda, while Bethesda Game Studios continues to lead Fallout.

Ever worried that your favorite studio might lose its soul after a corporate shake-up? That's exactly what Obsidian fans were fearing this week when Xbox announced a massive reorganisation that moved the studio under Bethesda. But Bethesda boss Jill Braff is here to calm those nerves.

In a memo to staff (obtained by IGN), Braff made it clear that Obsidian isn't just becoming a Fallout support studio. "The creative identity and strengths that make Obsidian distinct will remain at the core of their studio and work," she wrote. She also confirmed that Feargus Urquhart and the Obsidian leadership team will continue to lead the studio, now reporting directly to her.

This all comes after Microsoft announced hundreds more layoffs as part of a huge "reset" of its gaming business under new Xbox boss Asha Sharma. Nearly 2,000 staff have been cut, with more job losses expected throughout the rest of the financial year. As part of the reorg, Halo Studios was gutted, and the next mainline Halo game, Rare (Sea of Thieves), and World's Edge (Age of Empires) were handed to Activision. Obsidian, known for Grounded, The Outer Worlds, Avowed, and of course Fallout: New Vegas, was moved into Bethesda.

Why Bethesda? Well, Obsidian is already working on a new Fallout game, which was confirmed after the Xbox reset. Bringing them under the Bethesda umbrella makes sense, but some worried it meant Obsidian would be relegated to just helping out on Fallout. Braff's memo directly addresses that fear: "Bethesda Game Studios will continue to lead the Fallout franchise," she wrote, adding that the teams will build on their "longstanding relationship and the early work already underway on a new Fallout project."

Braff also reassured staff that this is "primarily a change in reporting structure" and that they're "not resetting our roadmap or asking teams to change what they're focused on." So for now, it's business as usual for Obsidian's current projects.

Of course, Bethesda has a ton on its plate. The Elder Scrolls 6 is the main focus, Fallout 5 is in pre-production, and remasters of Fallout 3 and Fallout: New Vegas are in the works. No release windows yet for any of those, nor for Obsidian's Fallout game. Meanwhile, Starfield "continues," though a sequel hasn't been confirmed. And with the Xbox reorg leaving Game Studios a shadow of its former self, fans are wondering if other studios like The Coalition, inXile, or Playground will also end up under Activision or Bethesda.

What do you think about Obsidian joining Bethesda? Are you excited for their Fallout project, or worried about what this means for their original IPs? Let us know in the comments!