Ethan Crossfield 
Should you care about a scrapped Obsidian project even if it never released? Yes—because a new report suggests the canceled RPG was so heavily compared to Fallout that it may have been functionally “Fallout, but not officially.” At the same time, Bethesda has outlined what’s next for Fallout and The Elder Scrolls, and Microsoft layoffs may be shaping how quickly those future plans come together.
What changed: a scrapped Obsidian RPG drew Fallout comparisons
An industry insider says Obsidian Entertainment’s canceled post-apocalyptic RPG was compared to Fallout by some Xbox leadership—so much so that the project was described as essentially Fallout in all but name. The comparison reportedly came up before Bethesda publicly detailed its next steps for the Fallout franchise.
The context matters for fans trying to understand whether Obsidian was ever aiming at an official Fallout entry. According to the report, Obsidian’s scrapped project initially had no direct ties to Fallout, but discussions around how “Fallout-y” it felt still influenced internal conversations. Those same discussions also touched on technology choices, with sources indicating debate about whether the project should use Unreal Engine 5 or Bethesda’s upcoming Creation Engine 3.
There’s also a separate thread involving Bethesda involvement: a previous Obsidian effort wasn’t intended to be a straightforward Fallout release, with Bethesda executive producer Todd Howard reportedly wanting to stay involved to enable potential collaboration on the scrapped IP. The insider further suggests Obsidian may have been aiming for a spiritual successor to New Vegas—at least at first—before it evolved into something that looked closer to a full Fallout direction.
Who is affected: Bethesda’s Fallout roadmap and Microsoft layoffs
Bethesda’s announcement landed soon after these rumors circulated. On July 17, Bethesda confirmed active development of highly anticipated Fallout 3 and Fallout: New Vegas remasters. The company also said it will team up with Obsidian again for a future Fallout release, though it did not share additional details.
Beyond Fallout, Bethesda’s plans include The Elder Scrolls 6 and Fallout 5, both described as being developed with Bethesda’s Creation Engine 3.
Meanwhile, the report places the rumors and Bethesda’s roadmap in a broader corporate environment. It notes that Microsoft’s gaming division recently went through major layoffs in early July, affecting multiple studios, including Bethesda and Obsidian. Developers speaking anonymously to ZeniMax Media suggested the job cuts could have lasting effects on how Fallout and The Elder Scrolls develop—especially because some roles lost included employees with years of experience that are difficult to replace quickly.
What comes next: perspective, engines, and the timeline question
The insider also clarifies how Obsidian’s scrapped RPG was described in terms of gameplay structure. It was not expected to use an isometric perspective like the first two Fallout games. Instead, it would have aligned more closely with modern Fallout titles by using a first-person RPG approach.
Given Obsidian’s recent output includes first-person RPGs such as The Outer Worlds 2 and Avowed, the report frames it as plausible that any future official Fallout work from Obsidian could continue that first-person direction.
Still, fans shouldn’t expect immediate answers. The report emphasizes that it’s currently unclear when Bethesda’s next games will arrive, and it’s also uncertain how the ongoing development of The Elder Scrolls 6 and Fallout 5 will be affected by the new working relationships and the earlier layoffs. For now, the safest takeaway is that Bethesda has a clear roadmap on paper, while Obsidian’s canceled project remains a cautionary snapshot of how close the studio’s ideas may have been to Fallout—before the franchise plans solidified.
What players should know
- A report claims Xbox leadership compared Obsidian’s scrapped post-apocalyptic RPG to Fallout before Bethesda’s latest Fallout announcements.
- Bethesda confirmed Fallout 3 and Fallout: New Vegas remasters are in active development, plus a future Fallout collaboration with Obsidian.
- The scrapped project reportedly leaned toward first-person gameplay rather than the classic isometric format.
- Microsoft layoffs in early July may influence how quickly Fallout and The Elder Scrolls projects move forward.
Expert View
If the rumors are accurate, the most interesting part isn’t just that Obsidian had a “Fallout-like” idea—it’s how early comparisons shaped internal conversations about engines, collaboration, and ultimately what Bethesda was willing to formalize. With Bethesda now confirming remasters and a new Obsidian team-up, the industry has moved from speculation to roadmap. The lingering uncertainty is timing and development impact, especially after the recent layoffs.
