Leaker says Obsidian's rumored Avowed 2 is safe, despite Xbox Game Studios layoffs

As CEO Asha Sharma “resets” Microsoft’s gaming business, several Xbox Game Studios are in danger. However, Obsidian Entertainment will likely avoid closure. Co-founder of the company, Chris Avellone, recently reiterated that Avowed 2 was in the works. While a rumor of a sudden cancellation emerged, a leaker has now denied the report.

Xbox gamers are on edge

Shpeshal_Nick, aka XboxEra’s Nick Baker, has an uneven track record but correctly predicted Game Pass additions like Persona 5. A social media post caused confusion before he corrected readers. Shpeshal_Nick shared an article about the Avowed sequel, with a South Park “And It's gone” meme above it.

After supporters of the Obsidian RPG began to panic, the leaker put their fears to rest. His initial post was a “joke”, but the reaction of these fans is understandable. With Sharma contending with meager profits, Xbox Game Studios, including Ninja Theory and Double Fine, may be at risk. Microsoft also has a history of axing high-profile Xbox games.

In the case of Ninja Theory, the Hellblade maker had just announced Senua at the June 7th Games Showcase. Regardless, Bloomberg is one of several sources reporting that the company now faces closure. The scenario shows how volatile the situation at Microsoft’s gaming division is.

Obsidian Entertainment hasn’t officially unveiled Avowed 2, but it previously hinted at its existence. In February 2026, it teased that more titles would take place in the RPG’s fantasy world of Eora.

An unlikely sequel?

Outspoken game designer and writer Chris Avellone is also confident in the sequel. When discussing the potential closures and layoffs on social media, he said, “There most certainly is an Avowed 2 in production.” It’s believed that Fallout: New Vegas writer George Ziets is leading development.

Avellone admitted he was a “little surprised” that the Xbox game is getting a follow-up. Although its predecessor enjoyed positive reviews, a day-one Game Pass debut may have cannibalized sales. Yet, after the second entry posted disappointing numbers, Obsidian’s The Outer Worlds 3 is not expected anytime soon.