Conflicting reports have surfaced regarding the future of Obsidian Entertainment, a Microsoft studio known for titles like "The Outer Worlds" and the upcoming "Avowed." A report from The Game Business suggests that Obsidian is among several studios negotiating with Microsoft to avoid closure as part of the company's broader business reassessment and recent wave of layoffs. This news follows earlier reports indicating that Arkane Studios, Double Fine, Compulsion Games, Ninja Theory, and Undead Labs are also potential targets for closure.
The Game Business report posits that some internal teams at Microsoft feel studios are being "punished for the poor performance of Call of Duty." According to insights from Christopher Dring, the revenue generated by games such as "Avowed" and "The Outer Worlds 2," even if they performed significantly better, would "seem almost insignificant" compared to the drop in "Call of Duty" sales. This perspective suggests that even successful titles from these studios may not offset the financial impact of underperforming major franchises.
However, Jason Schreier of Bloomberg has countered these reports, stating via BlueSky that Obsidian is "not in negotiations to avoid shutting down." Schreier, citing individuals familiar with the situation, confirmed that Xbox intends to keep Obsidian. While details surrounding the ongoing layoffs and the full scope of Microsoft's "reset" plan remain unclear, with a clearer picture expected soon, Schreier's assertion directly disputes the claims about Obsidian's negotiations.
Microsoft and Obsidian Entertainment have not officially commented on these reports at the time of writing. It is possible that the conflicting information stems from the dynamic and potentially volatile decision-making process within Microsoft's Xbox division as it navigates its strategic shift. The company's new CEO, Ash Sharma, is implementing a "reset" plan aimed at revitalizing the Xbox business, a move that industry observers anticipate could result in the loss of over 1,000 jobs and significant changes across various development teams.