Xbox's big reset continues, as the company has targeted RPG icon Obsidian Entertainment, laying off about a quarter of its staff and cancelling a sequel to the underrated 2025 action-RPG Avowed.
According to a July 8 Bloomberg report, Obsidian Entertainment has cancelled "multiple projects" so that the California-based developer can focus on a bigger franchise: Fallout. As part of the cuts, Avowed was a casualty, along with 52 workers, per a July 8 Game File report.
As Bloomberg noted, progress on the Avowed sequel was "going well" and "on track" to be announced in the next year. Obsidian Entertainment had even hoped to build upon the original game by developing the sequel more quickly using the already-created world and technology. Unfortunately, the project didn't fit into Xbox CEO Asha Sharma's overall strategy for Xbox, according to Bloomberg's sources.
That said, it appears there is actually a small chance the project could be un-canceled. According to Bloomberg, some of the remaining staff will continue working on the Avowed sequel with the hope that Xbox may see a reason for the project's existence in the future. But that's up in the air, despite reporting in February 2026 stating that Obsidian Entertainment would focus on more games in Avowed's universe, which it shares with Pillars of Eternity. (Pillars of Eternity is also in a state of limbo, with the last game, Pillars of Eternity II: Deadfire, launching in 2018 and receiving little to no news since its release.)
It's bummer news for fans of Avowed. Although the game didn't meet the sales expectations set forth by Microsoft, the high-fantasy RPG still reviewed relatively well following its February 2025 launch. GameSpot gave it a 6/10 in our Avowed review, but it has a "mostly positive" rating on Steam and an 80 Metacritic score.
I personally just finished Avowed after sinking more than 70 hours into the game, and I thoroughly enjoyed its mix of gunplay and melee combat. The narrative, while simple and predictable, was still enticing, and exploration was rewarding even if the world felt devoid of combat encounters after you've completed everything. It really is a solid amalgam of everything Obsidian Entertainment does well in a new setting.
A sequel could've been something awesome. The narrative ends on a cliffhanger, so there's more than enough meat on the bone to dig into the game's storytelling. On top of that, the world itself is rich with characters and conflicts worth exploring. And the powers! I never enjoy magic in games, but the spellcasting in Avowed felt great. I mained a big sword and two pistols, but on the occasions that I whipped out my spellbook, I felt like a badass wizard of the Living Lands.
Unfortunately, with this latest news, it appears that any hopes of an Avowed 2 have been dashed. The game's former director, Carrie Patel (who left in May 2025 to join the Netflix-owned studio Night Dive), wants to see more Avowed, but Microsoft just isn't interested anymore.
https://www.gamespot.com/articles/xbox-k...fs-report/