Obsidian's Fallout Could End Bethesda's Control of the Series

The idea of a new Fallout game from Obsidian Entertainment has generated renewed buzz within the gaming community. Still, it has also sparked a much broader discussion about the future of Bethesda Game Studios. For many long-time followers, the rumored project is a dream come true. Fallout: New Vegas is still one of the most beloved entries in the series, and it’s been a long time coming for Obsidian to return to the franchise.

But aside from the thrill of Josh Sawyer and Obsidian potentially coming on board, the anticipated alteration could drastically alter Bethesda’s relationship with Fallout. If you believe the current news and the industry grapevine, Fallout may no longer be Bethesda's franchise, but an Xbox property that other developers can work on.

That’s important for Bethesda. The studio has fought for years not to be defined by two brands alone, The Elder Scrolls and Fallout, while significantly investing in new intellectual projects like Starfield. But the current state of play implies their dreams may have hit a harsh reality. As for the rumored Fallout development restructure, it might further limit the studio's future focus, rather than expand Bethesda’s portfolio. Should Obsidian take over future Fallout games, Bethesda might increasingly be seen as the studio behind the Elder Scrolls, with Xbox deciding Fallout's future.

It’s no new idea that Bethesda never aspired to be a studio that alternated primarily between Fallout and The Elder Scrolls.

In 2016, former Bethesda CEO Pete Hines famously said that the studio shouldn't be considered a "vending machine" where you can push one button for an Elder Scrolls game and another for a Fallout game. Instead, Bethesda wants the freedom to go after new ideas and artistic goals. That idea eventually led to Starfield, a project Todd Howard described as a decades-long fantasy that would build a third pillar alongside Fallout and The Elder Scrolls.

In 2024, Todd Howard echoed his ideas in discussions about the future of Fallout. It’s good for people to “miss” a franchise instead of rushing out new releases, he claimed, citing Fallout 76 and Amazon's Fallout television series as examples of entertainment that kept the brand alive while Bethesda was focused elsewhere.

At the time, the strategy made sense. Fallout 76 kept getting updates, the TV show was a smash hit, and Bethesda stuck to its guns about making The Elder Scrolls VI. But critics said none of those projects could replace a brand-new single-player Fallout RPG. The criticism has only grown as the franchise approaches almost a decade without a new mainstream installment.

Various rumors and claims are circulating throughout the industry that the Xbox executive team has a different vision for Fallout than Bethesda did in the past. Rather than waiting for the franchise to sit on the sidelines as Bethesda takes its time developing new entries, Xbox apparently intends to make Fallout a more active series, with many projects in production.

If Obsidian is truly taking the reins on the next Fallout game and Bethesda is stepping back into a supervisory role, it would be a drastic change in how the franchise operates.

Todd Howard would apparently still have a role in keeping things consistent with the lore, as he has with the Fallout television series. Still, production duties might be progressively handed over to another company. For Xbox, it makes business sense. Fallout is one of Microsoft's strongest entertainment brands right now, and the TV show has been a hit. Leaving the series dormant for another decade would leave immense commercial potential unexplored.

For Bethesda, though, the decision might alter the studio’s identity forever. Maybe the biggest question mark hanging over these allegations is what constitutes success. If Obsidian can provide a critically acclaimed Fallout title that recaptures the charm of New Vegas while modernizing the series, there may be little reason for Xbox to fully restore development responsibility to Bethesda.

Instead, Bethesda might double down on The Elder Scrolls virtually exclusively, while Xbox spreads Fallout projects across multiple RPG studios. And that scenario looks even more likely when you factor in the Bethesda development timeline. With predictions that The Elder Scrolls VI could push much further into the future, Fallout 5, built purely by Bethesda, is unlikely to arrive until the mid-2030s.

It’s hard to rationalize waiting another decade for a mainline Fallout release, especially with Xbox having several RPG devs that can contribute to the franchise. Studios like Obsidian – and maybe other studios in Microsoft’s expanding first-party lineup – would be able to speed the Fallout release schedule, while letting Bethesda concentrate on its core fantasy franchise.

The rumored adjustment is also in line with Microsoft’s strategy for handling major game properties.

Over time, Halo Studios has become more of an oversight body, with external teams contributing to Halo projects. Eventually, Bethesda may take on a similar role, providing artistic direction for new Fallout experiences while other studios develop them. There are clear benefits to this approach. Remasters, spin-offs, and entirely new Fallout games might be handed to fans much more often than Bethesda alone could.

The series itself has also had a history of changing hands through multiple developers. Interplay was doing Fallout before Bethesda got hold of the series, and Obsidian's New Vegas showed that another team could successfully build on the universe without losing its personality.

Flexibility could suddenly be one of Fallout's greatest qualities. But there are also obvious concerns. Microsoft’s management of dormant brands like Banjo-Kazooie and the difficult creation of Perfect Dark show that Xbox can be very reactive when things don’t go well. Another long drought could easily hit the series if a new Fallout doesn't do well.

At least for the moment, reports imply that Bethesda will still be participating in the alleged Obsidian project, although more in a supervisory role than in charge of the entire development. Eyes are also on Josh Sawyer, whose recent interviews have speculated what a Fallout built by Obsidian would look like. A lot of fans are hoping the project will play to the studio’s strengths in player choice, world-building, and narrative depth, while updating the gameplay to meet the standards of a current open-world RPG.

It’s not clear whether the next game will be Fallout 5 or another major installment, but the broader tale is bigger than a single game. If Xbox has truly taken more control over the future of Fallout, Bethesda's decades-long attempt to avoid being known for a few franchises might be over. It’s ironic, then, that the studio that fought so hard against perceptions of being a two-button “vending machine” may now be down to just one button—The Elder Scrolls—with Fallout entering a new chapter as part of Xbox’s broader first-party strategy.