Contrary to previous reports, gaming titan Obsidian Entertainment, renowned for hit games like Fallout: New Vegas and The Outer Worlds, is reportedly safe from closure negotiations with Xbox. According to a clarification by Bloomberg's Jason Schreier, the studio is not in any immediate danger of shutting down. This comes amidst Microsoft's strategic revamping of the Xbox business, often referred to as the "reset." Despite the reassurances, layoffs are still expected to occur across various studios, with details becoming clearer by Monday. Obsidian, without a new announced project post-commercial underperformance of Avowed and The Outer Worlds 2, is currently focusing on Grounded 2, which was a successful launch in 2025. Despite the uncertainty, Obsidian's VP of operations, Marcus Morgan, has hinted at potential new Fallout projects, referencing the studio's beloved Fallout: New Vegas and its influence on Amazon's second season of The Expanse. New Xbox boss Asha Sharma is spearheading accelerated development for new Elder Scrolls, Fallout, and Halo games, leading to speculation about Obsidian's potential involvement in a future Fallout project. However, the fate of other studios like Arkane Lyon, Undead Labs, Double Fine, Ninja Theory, and Compulsion Games remains unclear as they are also reportedly in negotiations with Xbox leadership.