Table of Contents
Obsidian Bethesda Restructure Will Keep the Studio’s Identity Intact
Microsoft’s latest Xbox restructuring has created another round of uncertainty across its first-party studios, but Bethesda is trying to reassure Obsidian Entertainment employees about what their new arrangement actually means.
The changes saw 268 additional roles eliminated across Xbox, while several studios and franchises were reorganised. Among them, Obsidian is now moving under Bethesda, while Activision takes a significantly larger role elsewhere within Xbox.
Given the studio’s history as the developer behind Fallout: New Vegas, Avowed and The Outer Worlds, the move naturally prompted questions about whether the studio would retain its own creative identity or increasingly become tied to Bethesda’s franchises. According to Bethesda President Jill Braff, that’s still the plan.
Continue to Be Led by Feargus Urquhart
In an internal email obtained by Aftermath, Braff described the move as “primarily a change in reporting structure”, rather than a fundamental overhaul of how the company operates.
She also stressed that the studio’s “creative identity and strengths” will remain central to its work. CEO Feargus Urquhart and the existing leadership team will continue running the developer, with Obsidian now reporting directly to Braff.
The studio is not being absorbed into Bethesda Game Studios itself, nor has its existing leadership been replaced. Instead, Bethesda becomes the organisational home above the studio while Obsidian continues operating under its own management.
Bethesda Game Studios Still Leads Fallout
There is one area where the two studios will be working considerably more closely. Braff confirmed that Bethesda Game Studios will continue leading the Fallout franchise, while the new partners build on “early work already underway” on a new Fallout project.
That project emerged earlier this year following another major round of Xbox restructuring, which reportedly saw around a quarter of the workforce cut and several projects cancelled as the developer shifted resources towards Fallout.
For now, Bethesda has not revealed what form the new game will take, where it will be set or when players might actually see it. What is clearer is that Obsidian is not simply being transformed into Bethesda Game Studios’ support arm. Braff says both studios will retain separate accountability, with Bethesda Game Studios leading the franchise and Obsidian maintaining its own leadership and identity while collaborating on the new project.
After months of layoffs and restructuring across Xbox, that reassurance may not answer every question about Obsidian’s future, but it does clarify what its move under Bethesda is supposed to look like.
