Xbox is reportedly accelerating development on key franchises including Fallout, The Elder Scrolls, and Halo as part of a strategic shift under new leadership. This move by Xbox CEO Asha Sharma, aimed at revitalizing Microsoft's gaming division, has left Fallout fans eager for new entries but has also drawn caution from industry veterans.
The last mainline Fallout game was Fallout 76 in 2018, a multiplayer-focused entry in a series traditionally known for its single-player, open-world role-playing experiences. Fallout 4 was released over a decade ago, and the anticipated Fallout 5 remains a distant prospect, expected only after The Elder Scrolls 6.
Concerns Over Development Pace
Bruce Nesmith, lead designer on The Elder Scrolls V: Skyrim and a former Bethesda developer, expressed concerns about the potential impact of shortened development schedules. Speaking to FRVR, Nesmith stated that faster development times risk compromising quality, reducing features, and leading to a lack of polish or an increase in bugs. "The things that are done last end up getting set aside to complete the game on time," he explained, adding that while faster development times would result in quicker sequels, these could "risk disappointing fans."
Potential for Studio Collaboration
In light of these concerns, the possibility of external studios contributing to the Fallout franchise has been raised. Microsoft-owned Obsidian Entertainment, developers of the critically acclaimed Fallout: New Vegas, has been suggested as a candidate for either remasters or a potential Fallout: New Vegas 2. Bethesda's Todd Howard has remained non-committal on remasters, though they are reportedly still planned.
Josh Sawyer, director of Fallout: New Vegas and currently Studio Design Director at Obsidian, commented on the possibility of his studio returning to the franchise. In an interview with The 41st Precinct, Sawyer indicated that such decisions are made by higher-ups within Microsoft. "These are things that take place above my head," he said when asked about Obsidian's potential involvement in future Fallout projects. He noted that the original New Vegas development was also dictated by such top-level decisions.
Obsidian currently has no announced projects following the commercial underperformance of Avowed and The Outer Worlds 2. While rumors suggest a new Avowed game is in development, The Outer Worlds 3 is reportedly not. The studio's 2025 release, Grounded 2, was a commercial success.
Microsoft's Strategic Realignment
Xbox CEO Asha Sharma's internal memo revealed a significant financial reevaluation, stating that "over the past five years, we have spent over $20 billion on ongoing investments in our content, platform, and hardware subsidy, but our annual revenue has declined nearly half a billion during that time." This has led to reports of studio closures and a reassessment of external game development investments, including the cancellation of funding for IO Interactive's upcoming fantasy project. Microsoft confirmed it is "focusing on our highest priorities" and "not reducing our overall investment in games," but rather redirecting where that investment is placed.
Reports suggest this recalibration involves increased spending on popular franchises like Fallout and The Elder Scrolls, both noted for their iconic status and lack of recent mainline titles. This focus aims to re-engage long-time fans while potentially streamlining development processes across Microsoft's gaming studios.