Todd Howard Confirms Bethesda and Obsidian Reunion for Fallout

Bethesda Game Studios is expanding its Fallout slate with a new game from Obsidian Entertainment. The project brings the Fallout: New Vegas developer back to the franchise nearly 16 years after the game’s 2010 release.

The game joins Fallout 5, now in pre-production, alongside planned new versions of Fallout 3 and Fallout: New Vegas. Bethesda has not revealed the Obsidian project’s title, platforms, release window, setting, or engine.

Director and executive producer at Bethesda Game Studios, Todd Howard, told Bloomberg that “the timing is right” for the collaboration. He also noted that Bethesda continues to manage the Fallout franchise through its internal staff and franchise teams.

Bethesda Expands Fallout Plans After Xbox Cuts

The announcement follows Xbox layoffs that began on July 6, 2026. The cuts affected 1.6K employees, with another 1.6K reductions planned for the upcoming fiscal year (FY). Obsidian reportedly lost about a quarter of its workforce, while Bethesda also faced cuts. Howard described losing longtime colleagues as difficult for him and the teams involved.

The restructuring follows Xbox’s major investments in acquisitions and Game Pass, along with hardware pressures tied to the AI infrastructure build-out. Labor unions in the U.S. and Canada have also taken legal action over Microsoft’s handling of the layoffs.

Bethesda, meanwhile, is bringing its core teams closer together. The Elder Scrolls VI remains its primary development focus. Starfield will receive more content, including the Starborn DLC and additional Creation Club support. Fallout 76 is getting Raven Rock, an expansion positioned as a prequel to Fallout 3.

The Elder Scrolls Online will also continue receiving new seasons. ZeniMax Online Studios is set to work more closely with Bethesda. Creation Engine 3 is being developed to support simultaneous franchise development and improve Creation Club tools.

Obsidian’s return also challenges years of fan speculation about tension between the studios. Howard told Windows Central there is “a huge amount of mutual respect” between them. He stated that both sides had been looking for the right opportunity to collaborate again.

The new project gives Fallout another development track as Bethesda works on its other major franchises. It also reunites two studios whose previous collaboration produced one of Fallout’s most discussed entries.