Renowned RPG developer Obsidian Entertainment, behind titles such as The Outer Worlds, Avowed, Fallout: New Vegas and several other critically acclaimed games, is slated to lose roughly 60‑70 employees – about 25% of its workforce – according to a new Kotaku report that cites sources familiar with the matter.

Background and Microsoft Acquisition

Obsidian was acquired by Microsoft in 2018, quickly becoming one of the tech giant's most prolific studios. Since the purchase, the team has shipped two installments of The Outer Worlds, two entries in the survival title Grounded, the upcoming fantasy RPG Avowed, and the narrative‑driven strategy game Pentiment. Despite this strong portfolio, Microsoft announced a sweeping lay‑off of 3,200 jobs across Xbox in early June, a move that indirectly caught Obsidian in its cross‑hairs.

Details of the Layoffs

The Kotaku investigation indicates that between 60 and 70 roles at Obsidian are being eliminated. The reductions span multiple disciplines – artists, designers, writers, producers, programmers, and QA testers – and affect long‑tenured staff, some of whom have been with the studio for more than a decade. Notably, senior talent such as the art director for The Outer Worlds and, oddly, the studio’s only recruiter, are also on the chopping block.

Reactions from Affected Employees

Writer‑narrative designer Jay Turner, whose résumé includes work on Avowed, Dragon Age: Origins and Mass Effect 2, described the cuts on BlueSky as "Microsoft sacrificial rituals." His candid remarks underscore the emotional toll such abrupt reductions can have on creative teams.

Current Projects and Future Outlook

Despite the cuts, development on Grounded 2 is expected to continue, and Obsidian has pledged additional DLC for The Outer Worlds 2. However, beyond those commitments, the studio’s roadmap remains uncertain. An all‑hands meeting has been scheduled for today to outline next steps for the remaining staff and to address lingering questions about resource allocation.

Industry‑Wide Implications

The downsizing of a studio with Obsidian’s pedigree signals broader financial tightening within the gaming industry. Microsoft’s cost‑cutting measures illustrate that even well‑funded, high‑profile developers are not immune to market pressures. Analysts warn that such restructuring could slow innovation pipelines, yet it may also force larger publishers to streamline portfolios and focus on titles with clearer profit trajectories.