Avowed and Outer Worlds dev Obsidian is reportedly one of the Xbox studios negotiating to avoid closure
UPDATE: New report says Obsidian isn’t at risk
Obsidian Entertainment is one of the Xbox-owned studios currently negotiating with Microsoft to avoid closure.
That’s according to The Game Business, which lists the Avowed and The Outer Worlds studio alongside the previously reported Compulsion, Ninja Theory, Double Fine and Undead Labs as teams trying to avoid being shut down by Xbox management.
Update - Reporter argues claim
Bloomberg reporter Jason Schreier has now denied Obsidian is up for sale, claiming his sources believe the company will say with Microsoft.
“Despite a report this morning, I can confirm that Obsidian is not in negotiations to avoid shutting down,” he wrote on Bluesky.
“Plenty of details are still up in the air surrounding the layoffs (picture will be clear on Monday) but Xbox is keeping Obsidian, according to people familiar with the situation.”
“Studios such as Compulsion, Ninja Theory, Double Fine, Obsidian, Undead Labs and others are deep in negotiation with Microsoft to avoid closure,” the article reads. “The impact of this will likely reverberate across the business.”
Earlier this year Obsidian head Fergus Urquhart told Bloomberg that while Grounded 2 (which it co-developed with Eidos Montreal) was a “big hit”, neither The Outer Worlds 2 nor Avowed met sales expectations.
While the article didn’t directly quote Urquhart stating that both games sold less than expected, it claims that both games had “disappointing results”, then quotes Urquhart as saying the results of each game made the studio “think a lot about how much we put into the games, how much we spend on them, how long they take”.
Urquart also said in the February interview that the studio planned to “keep making games in the Avowed universe” – it’s now not known where those plans currently stand.
Microsoft is expected to carry out significant job losses across its Xbox business next week, as part of a major ‘reset’ being planned by CEO Asha Sharma.
According to media reports, Xbox’s cuts will begin on July 6 and lead to studio closures or spinoffs, potential studio mergers, and cancelled games.
As well as previous reports that Compulsion Games (South of Midnight), Double Fine (Kiln), Ninja Theory (Hellblade) and Undead Labs (State of Decay) are at risk of being shut down, it was also recently reported that Arkane Studios, best known for the Dishonored series, is also facing closure if Microsoft is not able to find a buyer for it.
