Reports: Bethesda Changes Rules for Obsidian, Studio Leadership Remains Unchanged for Now

Obsidian Entertainment will now report to Bethesda. Studio head Feargus Urquhart and its management will retain control over day-to-day operations following recent layoffs at Xbox.

Bethesda President Jill Braff informed Obsidian employees that the structural change is primarily administrative and will not affect the studio’s creative independence.

Urquhart and the current management team will continue to run Obsidian, reporting to Braff, while Bethesda Game Studios retains control over the Fallout franchise. Obsidian continues work on Grounded and a new game in the Fallout universe. The sequel The Outer Worlds 2 is not planned at this time.

Braff’s letter was obtained by journalists at Aftermath. It followed another wave of layoffs and restructuring within Xbox.

As a result of the reorganization, Obsidian lost 52 employees: 43 worked in the studio’s California offices, and another 9 were remote workers from the same state. According to Braff, the new Fallout game will continue the long-standing collaboration between the two studios, and Bethesda will share details in the coming months.