2025 was a landmark year for Obsidian Entertainment, marked by the release of three major titles: Avowed, Grounded 2, and The Outer Worlds 2. While an impressive feat for a team of under 300 people, studio head Feargus Urquhart acknowledges that not everything went as planned. According to recent reports, sales for Avowed and The Outer Worlds 2 fell short of Microsoft’s expectations, prompting a strategic shift within the studio.
While Grounded 2 proved to be a success, the underperformance of the two RPGs – despite not being considered “disasters” – has led Obsidian to re-evaluate its development approach. A key factor identified was the extended production timelines, exceeding six years for both titles, which drove up costs and expectations. This realization has spurred a move towards faster, more agile development cycles.
A New Focus on Efficiency and Realistic Expectations
Obsidian’s new plan centers around reducing development cycles from over six years per RPG to a more streamlined three to four years. This will be achieved by avoiding overly ambitious projects and leveraging existing technologies and engines, a strategy reminiscent of their work on Fallout: New Vegas. Urquhart reportedly questioned his engineers, asking if players truly value extensive time spent on minor details like inventory screens, highlighting a shift towards pragmatism and focused development.
The studio is also prioritizing collaboration with external partners, a model that proved successful with Grounded 2. This move aims to alleviate the strain on internal resources and accelerate the development process. The decision to forgo opening multiple international offices, opting instead for partnerships, underscores this commitment to maintaining the studio’s culture and avoiding overexpansion.
Shifting Priorities: What’s Next for Obsidian?
Despite the financial pressures from Microsoft, Obsidian remains committed to its core identity. The studio’s revised publishing plan includes several key initiatives:
- Expanding Existing Hits: The team will focus on delivering new content and downloadable content (DLC) for both The Outer Worlds 2 and Grounded 2.
- Building the Avowed Universe: Obsidian intends to develop further games set within the world of Pillars of Eternity/Avowed, aiming to establish a strong and recognizable brand.
- No The Outer Worlds 3: As of , a third installment in The Outer Worlds saga is officially off the table. The studio is prioritizing stabilization and resource allocation.
- Smaller Projects: The success of Pentiment demonstrated the potential of niche, lower-budget titles, and Obsidian will continue to explore opportunities for such experiments.
Obsidian’s long-term vision, dubbed the “100-year plan” by successors to Urquhart – Justin Britch and Marcus Morgan – emphasizes stability and avoiding fleeting trends. The goal is to consistently deliver high-quality RPGs without exhausting its employees. This plan isn’t a detailed roadmap, but rather a guiding principle for sustained longevity, drawing inspiration from companies like Nintendo, founded in 1889.
A Leaner Future, But Still Focused on RPGs
The studio’s approach to game development is also changing. Rather than aiming for unprecedented scale or cutting-edge graphics, Obsidian now intends to determine the appropriate investment level for each project based on the assumption of “mild success.” This represents a significant departure from pursuing blockbuster hits and aligns with the studio’s desire to remain “lean and invested,” ensuring employees don’t feel like mere cogs in a machine.
While Microsoft is applying pressure, Obsidian appears to be on solid ground as a key pillar of the Game Pass service. Urquhart, while jokingly referencing retirement, remains at the helm, dedicated to ensuring Obsidian continues to be a creator of compelling narratives, rather than simply a corporate spreadsheet entry. The studio’s commitment to a sustainable future, even in the face of commercial challenges, suggests a long-term vision that extends beyond immediate profits.
