As XBOX layoffs loom, reports say that even Obsidian Entertainment, the developer responsible for Fallout: New Vegas and The Outer Worlds, is at risk. Now, a conflicting report suggests the developer is safe.
Controversy surrounding the XBOX brand (namely impending XBOX layoffs) has continued to boil over since the XBOX Games Showcase at SGF 2026. Since then, reports have come out that have put many of the big development studios at XBOX on the chopping block. These development studios include Double Fine, Arkane Studios, Ninja Theory, and Compulsion Games as developers currently in limbo, and new conflicting reports have surfaced today surrounding another studio in the XBOX catalogue, Obsidian Entertainment.
Obsidian Entertainment has been a cornerstone of the XBOX roster for years, delivering multiple well-received games to the platform (including Fallout: New Vegas, The Outer Worlds, The Outer Worlds 2, and Avowed) and continuing to provide updates to the titles after release. Reports have surfaced suggesting that Obsidian Entertainment is now in negotiations to keep itself employed amid the impending XBOX layoffs (mentioned during the XBOX ‘reset’ announcement). If that isn’t chaotic enough, a new report has surfaced saying that is not the case and Obsidian Entertainment is safe.
The initial report came from The Game Business and instantly caught fire, making the rounds on the internet. Forum posts were erected on sites like Reddit, making posts turn into forlorn therapy sessions over the potential closing of one of gaming’s beloved studios. It turns out that’s not the case, however, as Bloomberg’s Jason Schreier has debunked the reports with his own post on social media. That post from BlueSky can be seen below.
Schreier says, “Despite a report this morning, I can confirm that Obsidian is not in negotiations to avoid shutting down,” mentioning that the finer details still have to be ironed out before they’re made official on Monday. This means that while the studio is not closing, XBOX layoffs could still happen there.
With all the studios currently facing potential doom on Monday from the XBOX reset (with many jobs in jeopardy), reports of other closures should be taken with a grain of salt unless they come from XBOX itself. XBOX promises it’s still investing heavily in gaming though.
