Microsoft has announced further changes within its Xbox division, leading to the layoff of 268 more employees and the reorganization of several studios. Some teams are being integrated into Bethesda and Activision, two well-known game developers. Among the affected studios is Obsidian Entertainment, which has created popular games such as Avowed, Outer Worlds, and Fallout: New Vegas. The studio is now joining Bethesda, a move that has raised concerns that Obsidian may be reduced to a secondary role within the Fallout franchise. Jill Braff, who leads game studios at Bethesda/ZeniMax, addressed employees in an email obtained by Aftermath. She stated that the creative identity and strengths that make Obsidian unique will remain central to the studio’s work. Braff confirmed that Feargus Urquhart and the leadership team at Obsidian will continue to lead the studio, which will now report directly to her. Bethesda Game Studios will continue to oversee the Fallout franchise, and the teams will build on their long-standing relationship and ongoing work on a new Fallout project. More details about the project are expected to be shared in the future. This restructuring is part of Microsoft’s broader strategy to focus on major franchises, while still ensuring clear responsibility for individual studios and their work. According to reports from Bloomberg in July, previous restructuring efforts had forced Obsidian to cancel several projects, including a sequel to Avowed, in favor of focusing on a new Fallout title. Despite these challenges, Obsidian has had recent successes with games like Pillars of Eternity, Outer Worlds, Avowed, Grounded, and Pentiment. Braff emphasized her personal relationship with Obsidian’s leadership, noting that she has had the opportunity to get to know Feargus Urquhart and his team over the past six years and has great respect for what they have built. She praised Obsidian for its "extraordinary creative talent, deep expertise, and a long history of creating games and memorable experiences." However, it remains to be seen how this creative talent will be valued in the years to come.