Obsidian Has Quietly Change into Xbox’s Secret Weapon

In 2022, Obsidian Leisure was the one first-party Xbox studio to ship a brand new sport, Pentiment. And in 2025, the Microsoft-owned studio has already launched one massive RPG, Avowed, and is ready to launch a second one, The Outer Worlds 2, later within the yr. If it wasn’t clear earlier than, it’s now: Obsidian has quietly grow to be certainly one of Xbox’s most necessary and worthwhile studios.

Let’s flash again to E3 2018. Throughout Microsoft’s massive showcase that yr, Xbox boss Phil Spencer introduced that the corporate had bought 4 completely different unbiased sport studios: Playground Video games, Ninja Idea, Compulsion Video games, and Undead Labs. Spencer additionally confirmed a brand new studio referred to as The Initiative had been created which, we’d later study, was charged with rebooting Excellent Darkish. Later in 2018, Xbox introduced it was shopping for two extra studios: InXile and Obsidian. Lastly, in 2019, Xbox purchased Double Effective. After the Xbox maker’s studio procuring spree, it had a huge secure of in-house builders.

Flash ahead to in the present day, virtually seven years later, and whereas all of these studios nonetheless stay, they haven’t launched that a lot. Right here’s the place they stand as of February 2025:

• The Initiative – Has but to launch a sport. Engaged on Excellent Darkish.
• Double Effective — Final sport launched: Psychonauts 2 (2021) – Manufacturing started earlier than Xbox acquisition.
• Compulsion Video games – Final sport launched: We Completely happy Few (2018) – Manufacturing started earlier than Xbox acquisition. South of Midnight is coming this yr.
• Undead Labs – Final sport launched: State of Decay 2 (2018) – Revealed by Xbox Studios.
• InXile Leisure – Final sport launched: Frostpoint VR (2020) – A VR shooter that hardly lasted 4 months. Not revealed by Xbox.
• Playground Video games – Final sport launched: Forza Horizon 5 (2021) – Revealed by Xbox. Fable reboot set for this yr.
• Ninja Idea – Final sport launched: Hellblade 2 (2024) – Additionally launched Bleeding Edge in 2020 underneath Xbox.
• Obsidian Leisure – Final sport launched: Avowed (2025) – Set to launch Outer Worlds 2 this yr. Beforehand, underneath Xbox, launched Grounded in 2020 and Pentiment in 2022.

It’s clear, when taking a look at that checklist above, that Obsidian is the outlier. A lot of the studios Xbox purchased or created round 2018 have solely shipped possibly one sport, and a few of these have been in improvement earlier than the Xbox deal. Different studios, like Compulsion, are lastly releasing one thing after seven years of Xbox possession. And if you happen to take a look at different Xbox studios, issues aren’t significantly better.

The Coalition hasn’t launched a brand new Gears sport since Gears 5 in 2019 and Uncommon hasn’t made a brand new sport since 2020’s Battletoads. (Although the studio does numerous assist on Sea of Thieves.)

In the meantime, Obsidian has shipped three video games since 2018 underneath Xbox and has one other massive RPG touchdown later this yr. And it launched Outer Worlds in 2019, a sport which began manufacturing earlier than the Xbox deal and wasn’t revealed by Microsoft, however was but yet another massive RPG from the corporate in a comparatively brief span of time. And there are rumors of the corporate already engaged on a brand new venture, too. So how did the studio attain this level?

How Obsidian grew to become Xbox’s most precious asset

Properly, throughout a chat at DICE Summit earlier this week, Obsidian Leisure VP of operations Marcus Morgan and VP of improvement Justin Britch talked concerning the firm’s philosophy of staying lean and making good investments in medium-sized video games that don’t take a decade to make. The studio heads additionally emphasised protecting headcount low and aiming for as little turnover as potential to assist the studio achieve extra institutional data.

The purpose: The duo need Obsidian to final 100 years. Actually. When requested concerning the purpose of protecting the studio round for 100 years, lengthy after they’re lifeless, they stated: “Are we critical? … Sure.”

And truthfully, I believe Obsidian can pull it off. It clearly has a workforce of people that perceive methods to construct correctly scoped video games utilizing comparatively small groups whereas managing a number of tasks directly.

In an business the place some studios lay folks off on a regular basis and spend 5 to seven years engaged on one sport, Obsidian has gone a unique path. And the top end result is without doubt one of the best and profitable studios round. I guess Microsoft is comfortable they snagged the place up again in 2018.

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