Since its acquisition by Microsoft in late 2018, Obsidian Entertainment has emerged as one of the most consistently productive studios under the Xbox Game Studios banner. While high-profile titles such as Fable, Everwild, State of Decay 3, and Perfect Dark remain absent from release schedules or significant updates, Obsidian has already released multiple projects. It has several more on the way, demonstrating a level of efficiency that stands out in Microsoft’s first-party development lineup.
Obsidian’s journey since joining Microsoft has been transformative. Previously known for working under tight budgets and publisher restrictions, the studio flourished after becoming part of Microsoft’s first-party lineup. Their debut project under Microsoft, The Outer Worlds, launched in October 2019 to both critical acclaim and commercial success, with a Nintendo Switch version following in 2020. The game perfectly demonstrated Obsidian’s expertise in creating rich, choice-driven RPG experiences.
The studio maintained this momentum with Grounded, an innovative cooperative survival game that shrunk players into a backyard micro-world. After launching in early access in 2020 and fully releasing in 2022, it developed a loyal following and became one of Obsidian’s surprise hits. That same year, they released Pentiment, Josh Sawyer’s narrative-driven historical adventure, which won widespread praise for its distinctive art style and deep storytelling.
2025 proved to be another strong year for Obsidian. The studio launched Avowed, their long-awaited first-person fantasy RPG, first revealed in 2020. Additionally, The Outer Worlds 2, announced in 2021, is scheduled for release on October 29, 2025. The recent Xbox Games Showcase also revealed Grounded 2, a sequel to their popular survival game, which is set to launch in early access on July 29, 2025.
The contrast couldn’t be more striking. While Obsidian has maintained a steady release cadence, other Microsoft studios have seen their flagship projects languish in development. Playground Games’ Fable (2020), Rare’s Everwild (2019), The Initiative’s Perfect Dark (2020), and Undead Labs’ State of Decay 3 (2020) have all gone years without significant updates or gameplay footage. Their absence from recent showcases has left fans questioning when – or if – these titles will materialize.
Obsidian’s productivity stands as a testament to what focused development can achieve. In the time it’s taken other studios to produce little visible progress, Obsidian has successfully shipped multiple titles while advancing several more, all while maintaining its signature quality across different genres. This output not only demonstrates their technical proficiency but also their ability to adapt to Microsoft’s ecosystem.
The studio’s performance raises important questions about resource allocation and project management across Xbox Game Studios. While some teams struggle with protracted development cycles, Obsidian has shown that consistent delivery is possible without compromising creative ambition. Their approach could serve as a valuable case study for Microsoft’s broader first-party strategy.
