Recent restructuring within Xbox has led to significant changes, including layoffs and studio mergers. Among these shifts, Obsidian Entertainment is now being organized under Bethesda. However, Jill Braff, head of Bethesda Game Studios, stated in a leaked internal memo that Obsidian will preserve its "creative identity and strengths that make Obsidian distinct."
Braff clarified that this organizational change is primarily a modification to the reporting structure. While Obsidian and Bethesda Game Studios will collaborate closely on Obsidian's upcoming Fallout project, they will continue to operate as separate entities. Obsidian, known for its work on Fallout: New Vegas, has generated excitement for its return to the Fallout series.
The memo also suggests that this reorganization aligns with Microsoft's increasing focus on a "franchise-led model." According to CEO Asha Sharma, the company intends to prioritize existing intellectual property, potentially reducing the emphasis on new IPs. Over the past 15 years, Obsidian has released a diverse portfolio including Pillars of Eternity (and its sequel), The Outer Worlds (and its sequel), Pentiment, Avowed, Grounded, and Tyranny. In comparison, Bethesda's output has been more limited, with Starfield being its most recent original title.
While Obsidian appears secure, its future creative freedom may be influenced by this new structure. Braff's statements suggest a likely focus on sequels for Bethesda's established franchises or Obsidian's own series. This approach may reflect Xbox's broader strategy amid its current business conditions.
The full memo from Jill Braff reads:
Hi everyone,
Following the note from Matt, I wanted to share more on today’s news and what it means for our collective teams.
I’ve had the opportunity to get to know Feargus Urquhart and his team over the past six years, and I have great respect for what they’ve built. Obsidian has extraordinary creative talent, deep expertise, and a long history of creating memorable games and experiences. I’m looking forward to working more closely with them.
Today’s announcement is primarily a change in reporting structure. The creative identity and strengths that make Obsidian distinct will remain at the core of their studio and work.
Feargus and the Obsidian leadership team will continue to lead Obsidian, with the studio reporting to me. Bethesda Game Studios will continue to lead the Fallout franchise. Together, the teams will build on their longstanding relationship and the early work already underway on a new Fallout project, with more to share in the months ahead. This structure supports the franchise-led model we’ve been strengthening while keeping accountability for both the studio and the franchise clear.
I also recognize that employees across our studios, publishing, and business teams will have questions about what this means for our current priorities, roadmap, and responsibilities. To be clear, we’re not resetting our roadmap or asking teams to change what they’re focused on. We’ll take the time to understand how teams can best support one another, and where closer partnership can benefit our players and fans. We’ll continue communicating as we progress.
I’m looking forward to spending more time with the Obsidian team and building on the strong foundation already in place across our organizations.
Welcome Feargus and team – more soon!
Jill