Support NeoGAF

[IbizaPocholo]

https://www.bloomberg.com/news/arti...nd-grounded-outer-worlds-is-charting-new-path

Obsidian Entertainment is pivoting to faster development cycles of 3-4 years per game by reusing technology, outsourcing, spacing releases, and balancing big and small projects to meet Microsoft's profitability pressures amid a challenging industry landscape.

Summary

• Obsidian Entertainment, a Microsoft-owned Xbox studio in Irvine, California, released three games in 2025—Avowed (trippy fantasy RPG), Grounded 2 (survival game), and The Outer Worlds 2 (dystopian sci-fi RPG)—marking a prolific "Year of Obsidian," but Avowed and The Outer Worlds 2 failed to meet Microsoft's sales forecasts despite Grounded 2 being a hit.
• CEO Feargus Urquhart holds weekly breakfast meetings with his management team to discuss the studio's future, reflecting on underperforming games as learning opportunities rather than disasters, amid a shaky games market and turmoil in Microsoft's Xbox division pushing for higher profit margins.
• Development timelines for Avowed and The Outer Worlds 2 exceeded six years each, inflating costs; Urquhart aims to reduce this to three or four years per title by reusing technology across projects, avoiding rebuilding systems like animation or inventory screens every time, and embracing outsourcing.
• Grounded 2 was developed more efficiently by outsourcing to Eidos Montreal, with Obsidian senior staff like co-founder Chris Parker overseeing remotely, enabling quicker pivots such as cutting shared multiplayer "buggies" functionality to save months of development.
• The studio, with about 280 employees, was stretched thin supporting three simultaneous releases, leading to burnout; future plans include spacing releases to better manage resources, as noted by design director Josh Sawyer.
• Obsidian's history includes founding in 2003 after Interplay's near-bankruptcy, surviving on contracts for Star Wars, Fallout, and South Park games, near-collapse in 2012 after Microsoft's Stormlands cancellation (salvaged via Kickstarter), and acquisition by Microsoft in 2018.
• Avowed originated as an ambitious Skyrim-Destiny hybrid pitch during acquisition talks but lost multiplayer after two years and changed directors, extending development to nearly seven years.
• The Outer Worlds (2019) was a surprise hit selling 5 million copies; its sequel faced pandemic delays and tech challenges, with director Brandon Adler noting dislike for long dev cycles of five to seven years.
• Industry context: Game development costs have risen from seven figures in the 1990s to nine figures today, leading to widespread layoffs (tens of thousands since 2023, including at Xbox), studio closures, and project cancellations; Xbox faces flat revenue growth, declining console sales, and shift to AI priorities post-$69 billion Activision Blizzard acquisition.
• Microsoft's Xbox imposes a 30% profit-margin target on studios; Obsidian benefits from Game Pass subscriptions, critical acclaim, and long-tail RPG sales that boost hardware, as stated by Xbox GM Mary McGuane.
• Strategies for sustainability: Juggle multiple projects (big and small, new games plus DLC for Outer Worlds 2 and Grounded 2), retain staff, avoid headcount bloat, pursue moderate successes over trends; no third Outer Worlds planned but continuing Avowed universe.
• Leadership transition: Urquhart grooming lieutenants Justin Britch (33) and Marcus Morgan (36), who presented "Obsidian's 100-Year Plan" at D.I.C.E. Summit emphasizing consistent output for breakout hits.
• Lessons from 2025 releases: Consider adding features like player crimes/arrests in Avowed or stronger companions in Outer Worlds 2 for engagement; Urquhart emphasizes making games people want to play and buy.
• Past efficiency example: Fallout: New Vegas (2010) cost $8 million and took under two years by reusing Fallout 3 tech.
• Pentiment (2022) was a low-cost, critically acclaimed niche success, showing value in smaller projects; Xbox praised for funding creative range.

 

[Punished Miku]

Most underrated studio this gen. Great games released fast with small staff size in multiple genres. This is how you run a studio.

 

[LordCBH]

Most underrated studio this gen. Great games released fast with small staff size in multiple genres.

Agreed. Liked Avowed, liked TOW2, liked Pentiment. Grounded ain't my thing, but that's fine. Still looks like a good game. And their output in the years preceding purchase was also pretty darn good with Pillars and Tyranny and the first TOW, plus doing Stick of Truth with Ubi.

 

[SEGAvangelist]

If they can get the rot out of their studio, they'll be golden. I'm glad they recognize they need to make better characters.

 

[CowboyLou]

Maybe they should hire some better writers.

 

[Senua]

Please make your games more gritty and dark fantasy again. Stuff like Pentiment is great, but for the big hitters like Outer Worlds and Avowed the tone has just been off for me, has failed to draw me in like PoE and New Vegas

 

[Gonzito]

The problem I see with this studio is the writing. In Avowed the writing was quite mediocre. In OW2 it's better but still, they used to be better in this regard

It doesn't help either that there is wokism inside their studio which might explains the drop in quality in terms of writing

Obsidian is a studio that has thr potential to do awesome games but in the end they always end up making just decent or good quality games without greatness.

I hope they do better in the future. OW2 was a step in the right direction but still, it wasn't enough imo

 

[Ass of Can Whooping]

Great studio. Avowed was eh but OW2 was peak

Don't @ me retards

 

[Darkness_Arises]

These games would do far better if they released at 40-50$. That way they could have had a lot of gamer goodwill, just like E33. I have no idea why games like Avowed and TOW2 released at 70$. They have reduced the price for the ps5 release, but I am afraid it might be too little too late.

 

[coachmcguirk91]

Most underrated studio this gen. Great games released fast with small staff size in multiple genres. This is how you run a studio.

All of their games are good not great. Which is why games like Avowed and The Outer World's 2 struggled sales wise. Developing games fast is the issue. Their games are 75% of an amazing game. So much potential if given the proper resources. 70$ does their games a disservice too

 

[Gamer_By_Proxy]

Next time I update my resume cause I'm about to be laid off, I'm gonna say I'm reinventing myself.

 

[vaibhavpisal]

Going in right direction for sure.

Both Avowed and OW2, they have come far in terms of gameplay. Big sticking point previously.

 

[geary]

I can count on one hand the number of studios that have competent writing. The outliers are not the norm. Same with graphics. If Ferrari have top cars, doesnt mean Toyota is trash.

 

[adamsapple]

Great studio. Avowed was eh but OW2 was peak

Don't @ me retards

Why are we agreeing on so many things these days ... it's unsettling.

 

[DenchDeckard]

Outer worlds 2 is awesome. Grounded is sick. Pentiment was dope. GG obsidian. Keep it up.

Good studio.

 

[adamsapple]

Outer worlds 2 is awesome. Grounded is sick. Pentiment was dope. GG obsidian. Keep it up.

Good studio.

Avowed is also awesome.

I shan't hear exceptions.

 

[Cyberpunkd]

Most underrated studio this gen. Great games released fast with small staff size in multiple genres. This is how you run a studio.

Once great studio degenerated into making GamePass slop - yes, truly "underrated studio". Hey, Obsidian, want to make money again? Look at New Vegas and Tyranny, or Pillars of Eternity, there are some hints there what you can do. HINT: Paperthin edgy characters is not that.

 

[Cyberpunkd]

Outer worlds 2 is awesome. Grounded is sick. Pentiment was dope. GG obsidian. Keep it up.

Good studio.

Outer Worlds was mid, I don't remember a single thing from that game. I still remember the beginning of PoE 10 years later.

Grounded - cute, where's the RPG part?

It's an RPG studio, they make best games where they are able to focus on the quality of writing.

 

[tronied]

I like Avowed but never got into the Outer Worlds

 

[Fess]

I like Avowed but never got into the Outer Worlds

I finished and mostly enjoyed Avowed, but in the end it competed with Oblivion for me and lost terribly.

I've played maybe 10 hours of The Other Worlds 2, I liked it but it also competed with Oblivion since I hadn't stopped playing that yet, and again lost terribly.

So, Obsidian, start making your games more like Bethesda's games. Minus the jank. Better interactivity, physics, life, open world and full of side content.

 

[vaibhavpisal]

I finished and mostly enjoyed Avowed, but in the end it competed with Oblivion for me and lost terribly.

I've played maybe 10 hours of The Other Worlds 2, I liked it but it also competed with Oblivion since I hadn't stopped playing that yet, and again lost terribly.

So, Obsidian, start making your games more like Bethesda's games. Minus the jank. Better interactivity, physics, life, open world and full of side content.

They will have to make their games in Creation Engine. Would love to see that.

Instantly will be a massive upgrade in so many things.

 

[Spyxos]

Weren't they already among the studios that release games quickly and in large numbers?