According to The Game Business, Obsidian Entertainment would be among Xbox Games Studios negotiating with Microsoft to avoid closure. The report lists the developer of The Outer Worlds and Avowed alongside other studios already reported as at risk: Ninja Theory (Hellblade), Compulsion Games (South of Midnight), Double Fine (Psychonauts), and Undead Labs (State of Decay 3).
However, conflicting reports quickly emerged. GamesRadar and Push Square cite sources claiming Obsidian is not under threat of closure, contradicting the initial Game Business report. The disagreement between sources and the speculative nature of the original claim, treated by outlets as rumor and negotiation, leaves the situation unresolved.
The broader context involves a series of cuts and restructuring within Xbox Games Studios. Separately, OtherSide Entertainment announced layoffs of 18 employees, leaving fewer than 10 people at the studio, with the company stating there are no plans for new projects. The developer cited ongoing commercial difficulties in making immersive sims with long production cycles.
