Bethesda Game Studios now manages Obsidian Entertainment, taking over the studio’s management from Xbox Game Studios as both teams continue work on a mysterious new Fallout game.
Xbox Game Studios had managed Obsidian for more than seven years after the studio’s November 2018 acquisition. During that period, Obsidian worked on Grounded, its early-access sequel, Pentiment, Avowed, and The Outer Worlds 2. The new arrangement brings the Fallout series’ primary studio closer to the team behind Fallout: New Vegas.
Obsidian’s Fallout project remains separate from the announced remasters
Bethesda and Obsidian confirmed their collaborative Fallout project in July 2026, but neither studio has identified which game it is. Bethesda is also developing Fallout 5, which remains in pre-production, and has confirmed work on Fallout 3 and Fallout: New Vegas remasters.
Obsidian’s history with Fallout makes the management change especially relevant. The studio developed Fallout: New Vegas, which launched in 2010, while Bethesda Game Studios oversees the wider franchise and The Elder Scrolls. That connection gives the companies plenty of shared history, even though the identity and scope of their new project remain open.
Xbox places several studios into new groups
Matt Booty, Xbox’s chief content officer, outlined the wider restructuring in an Xbox Wire update. Xbox said it wants to operate fewer business units, align groups that already work closely, and focus its publishing expertise.
Obsidian’s projects will continue under the new arrangement, including Grounded and the Fallout collaboration with Bethesda Game Studios. The announcement changes the studio’s reporting structure without announcing a new direction or release timing for either project.
Rare and World’s Edge are moving under Activision as part of the same reorganization. Activision will also develop the next Halo title through a new purpose-built team that remains separate from ongoing development and plans for Call of Duty. A small team at Halo Studios will continue supporting the Halo community and the games currently in market, while Xbox has not announced a release date for the next Halo project.
The wider Xbox reset follows the July 2026 layoffs. Earlier cuts reached Bethesda’s Fallout and The Elder Scrolls teams, while the broader reset also affected a further 268 employees.
For now, the management change is the confirmed development. Bethesda has not said whether the new collaboration will be Fallout 5, a new version of Fallout: New Vegas, or another Fallout project altogether. No release timing has been announced for the collaboration.
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