„Despite a report this morning, I can confirm that Obsidian is not in negotiations to avoid shutting down.“ Bloomberg reporter Jason Schreier said on Bluesky, directly contradicting earlier claims that the studio was at risk of closure. This statement, verified by multiple sources, has calmed some fears, but uncertainty remains about Xbox’s broader restructuring plans.
„Studios such as Compulsion, Ninja Theory, Double Fine, Obsidian, Undead Labs and others are deep in negotiation with Microsoft to avoid closure,“ according to one report, highlighting the complexity of the situation.
===
Obsidian’s Status: Schreier’s Denial vs. Rumors
Bloomberg’s Jason Schreier, a trusted source in gaming journalism, directly refuted claims that Obsidian Entertainment was in danger of shutting down. „Plenty of details are still up in the air surrounding the layoffs (picture will be clear on Monday) but Xbox is keeping Obsidian, according to people familiar with the situation,“ he wrote. This statement came after The Game Business reported that Obsidian was among studios negotiating to avoid closure.
Schreier’s denial aligns with a broader pattern of conflicting reports. While some outlets suggested Obsidian was safe, others, including Video Games Chronicle, cited The Game Business as claiming the studio was „deep in negotiation with Microsoft to avoid closure.“ The contradiction underscores the uncertainty surrounding Xbox’s restructuring, which includes potential layoffs and studio closures.
„Despite a report this morning, I can confirm that Obsidian is not in negotiations to avoid shutting down,“ Schreier reiterated, emphasizing that „Xbox is keeping Obsidian.“ This clarification came days after the initial rumors, with some sources noting that „the picture will be clear on Monday.“
Threats to Undead Labs and State of Decay 3
===
Undead Labs and State of Decay 3: A New Concern
While Obsidian’s fate appears resolved, other studios face greater uncertainty. Forbes reported that Microsoft may be seeking a buyer for Undead Labs, the developer behind the State of Decay series. If no buyer is found, the studio could be shuttered, leading to the cancellation of State of Decay 3, which was recently showcased at the Xbox Games Showcase.
The game, set for release in 2027, has already faced delays, with no fixed release date. Its cancellation would mark a significant blow to Xbox’s portfolio, as the State of Decay series has maintained a dedicated fanbase since its 2013 debut. „This would be a crushing blow, probably more so than any other announced cancellation would be with these pending layoffs and shutdowns,“ the Forbes article noted.
Microsoft’s decision to potentially sell or close Undead Labs reflects broader concerns about the company’s strategy. „The impact of this will likely reverberate across the business,“ one report stated, suggesting that the restructuring could lead to a „harder look“ at which studios and games are prioritized.
Fiscal Challenges Driving Corporate Restructuring
===
Financial Pressures and the „Hard Decisions“ Narrative
Microsoft’s restructuring efforts are driven by financial pressures. A statement from an unnamed source, cited in Video Games Chronicle, revealed that „Excluding Activision Blizzard King, 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. Going forward, this cannot continue.“
This financial reality has fueled speculation about which studios will survive. While Obsidian is reportedly safe, other studios like Arkane Lyon (developer of Dishonored) and Compulsion Games (creator of South of Midnight) are also under threat. „The studio is going to be hacked down to its biggest series and biggest studios and simply nothing else,“ one analyst warned, highlighting the risk of smaller titles being sacrificed.
Developer Perspectives on Fallout and Franchise Legacy
===
The Fallout: New Vegas and the Future of IPs
Despite the uncertainty, some developers remain optimistic. Josh Sawyer, the director of Fallout: New Vegas, recently told The 41st Precinct that he has no idea if he’ll get the chance to make a new Fallout game. „These are things that take place above my head, right?“ he said, underscoring the top-down nature of Microsoft’s decision-making.
Marcus Morgan, Obsidian’s VP of operations, echoed similar sentiments, noting that „I know everyone on the internet, on every game we ever announce, will constantly reference back to, ‚When’s the next New Vegas?'“ This pressure highlights the challenge of balancing commercial expectations with creative ambitions.
===
What Comes Next?
The coming weeks will be critical for Xbox’s restructuring. Microsoft is expected to announce significant job cuts starting July 6, with potential studio closures or spinoffs. While Obsidian appears secure, the fate of other studios remains unclear.
For fans, the uncertainty raises questions about the future of beloved franchises. „If this is true, it shows just how deep Microsoft is willing to cut,“ one report noted, emphasizing the stakes for both developers and players. As the situation unfolds, the gaming community will be watching closely to see which studios survive and which are left behind.
„Plenty of details are still up in the air surrounding the layoffs (picture will be clear on Monday),“ Schreier wrote, suggesting that the full picture may not emerge until early July. Until then, speculation will continue to dominate the conversation.
===
Hyperlinks
„Despite a report this morning, I can confirm that Obsidian is not in negotiations to avoid shutting down.“ Bloomberg reporter Jason Schreier said on Bluesky, directly contradicting earlier claims that the studio was at risk of closure. This statement, verified by multiple sources, has calmed some fears, but uncertainty remains about Xbox’s broader restructuring plans.
https://www.windowscentral.com/gaming/xbox/no-xboxs-obsidian-studio-isnt-shutting-down-new-comments-dispute-closure-claims
„Studios such as Compulsion, Ninja Theory, Double Fine, Obsidian, Undead Labs and others are deep in negotiation with Microsoft to avoid closure,“ according to one report, highlighting the complexity of the situation.
https://www.videogameschronicle.com/news/avowed-and-outer-worlds-dev-obsidian-is-reportedly-one-of-the-xbox-studios-negotiating-to-avoid-closure/
„Forbes reported that Microsoft may be seeking a buyer for Undead Labs, the developer behind the State of Decay series. If no buyer is found, the studio could be shuttered, leading to the cancellation of State of Decay 3.“
https://www.forbes.com/sites/paultassi/2026/06/30/concern-mounts-about-rumored-state-of-decay-3-cancellation-at-xbox/
„Microsoft’s restructuring efforts are driven by financial pressures. A statement from an unnamed source, cited in Video Games Chronicle, revealed that ‚Excluding Activision Blizzard King, 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. Going forward, this cannot continue.
Find more reporting in our Technik und Wissenschaft section.
