Avowed 2 Has Not Been Cancelled Following Layoffs at Obsidian – Rumor

Former co-founder Chris Avellone said that he had heard from those still at the studio that it's planning a "re-pitch" of Avowed 2.

Posted By | On 10th, Jul. 2026

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In light of recent layoffs at Xbox, rumors have indicated that Obsidian Entertainment was working on a sequel to its first-person action RPG Avowed, which reportedly got cancelled in favor of a new Fallout game developed by the studio. However, former co-founder of Obsidian, Chris Avellone, has taken to social media claiming that Avowed 2 has not been cancelled.

According to Avellone, Obsidian was told that the projects it currently has in development were being “re-evaluated”. The studio is still seemingly on track to deliver on its planned expansions for The Outer Worlds 2, and while full development on Avowed 2 hasn’t yet begun, developers are reportedly hoping to “re-pitch” the concept.

“Aside from other news, Obsidian employees appear to have been told all the company’s projects were being ‘re-evaluated’ today,” wrote Avellone. “It seems Grounded is still going (mostly out-sourced in Eidos Montreal anyway, so no surprise), Outer Worlds 2 expansions still planned for now (1st one is Sept), and uh, despite reports, Avowed 2 is STILL being worked on (for now) in the hopes of being ‘re-pitched’ (whatever that means).”

He went on to note that other projects were paused, including a rumored game based on the Shadowrun pen-and-paper tabletop RPG headed by John Gonzalez. Pillars of Eternity was also not mentioned. Responding to another post about how Avowed 2 may have been cancelled, Avellone claims, “They’re still working on it as of today, according to folks at Obsidian. They’re trying to ‘re-pitch’ it when the dust settles, probably because so much work was already put into it.”

It is worth noting that, while Avellone has spent quite a bit of time at Obsidian working on projects like Pillars of Eternity, Star Wars: Knights of the Old Republic 2 – The Sith Lords, and Fallout: New Vegas, he left the company in 2015. This means that any information he gets depends on his sources that are still working there. In the meantime, Avellone himself has worked as a freelance writer on a variety of projects, with his most recent contribution being Pathfinder: Wrath of the Righteous.

In the meantime, Obsidian Entertainment was seemingly hit quite hard by Xbox’s layoffs, with reports indicating that it lost around 25 percent of its workforce. Some of the now-former employees of the studio include The Outer Worlds art director Daniel Alpert, alongside other experienced developers, and even the recruiter.

The studio’s most recent releases have included Avowed, The Outer Worlds 2, and the Early Access launch of Grounded 2. Currently, the studio hasn’t made any announcement regarding potential project cancellations or that it will stop its ongoing development of Grounded 2.


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