Obsidian is reportedly working on a new Fallout game, with some outlets suggesting that this project has led to the cancellation of Avowed 2. The studio, known for its work on The Outer Worlds and Grounded, is undergoing significant changes, including layoffs that may be related to the shift in focus. However, it is unclear what specific project Obsidian is prioritizing, as some reports conflict about the studio's interest in working on a new Fallout game.