Obsidian Entertainment will now fall under Bethesda's management, but the studio's creative identity and existing leadership structure will remain unchanged. Bethesda President Jill Braff confirmed that Obsidian CEO Feargus Urquhart and his leadership team will continue to run the studio.
This change comes after Xbox announced a new round of layoffs and studio consolidations. Obsidian is one of the teams affected by these organizational changes, with notable titles including The Outer Worlds, Grounded, and Avowed.
In an email to employees, Anghele Braff stated that Obsidian's distinct creative identity and strengths will remain central to the studio and its projects. Following the restructuring, Obsidian will report directly to her, while the current management team continues to oversee day-to-day operations.
Bethesda Game Studios will continue to lead the Fallout franchise. Obsidian has already joined a new Fallout project, with pre-production currently underway, and both parties plan to share more details in the coming months.
Obsidian previously developed Fallout: New Vegas, but its portfolio extends beyond the Fallout series. Braff stated that the new management structure supports Bethesda's strengthened franchise-led model and clarifies responsibilities for both the studio and specific game series.
When Microsoft first announced the Xbox business "reset" plan this July, Obsidian had already seen several projects cancelled. Among them was reportedly Avowed 2, which still had a small team working on it at the time. The email did not clarify whether Obsidian will continue to develop original IPs in the future or primarily work on Bethesda's existing franchises.