PSA: Brand-New Fallout Game Was Reportedly Canceled Earlier This Year

Although exact details are far and few between, a brand-new Fallout game was reportedly in development at a non-Bethesda Microsoft-owned studio before being canceled as of earlier this year. This Fallout news is bad in and of itself, but it’s worse when considering how the sharks are circling Bethesda and Xbox studios.

Xbox CEO Asha Sharma recently announced that the company would be undergoing a major “reset” in how it invests in its games, pulling resources from locations (resulting in upcoming layoffs and studio shutdowns that are still not yet 100% clear), and reallocating them to faster and core development of games like Call of Duty, Halo, Fallout, and The Elder Scrolls. No doubt a lot of eyes are on the latter games, but most importantly, those are Bethesda games—beloved ones. Faster development does not mean better games, but whatever the plan to reinvest in these titles is, it’s strange then to hear rumblings of a cancellation.

As Xbox Invests More in Fallout, It Reportedly Canceled a Fallout Game?

Back in April, Jeff Gerstmann reported on his podcast that he was aware of a Fallout “thing” that was being worked on at a Microsoft-owned Studio, implied not to be a studio under the Bethesda umbrella (or at least not Bethesda proper), before reportedly being canceled. “No longer going to see the light of day” is his exact words, available at the 2:48:52 time-mark in the video above. For those unfamiliar with Gerstmann, he’s an old head in video game journalism who served as editorial director at GameSpot for a decade and co-founded Giant Bomb, meaning this isn’t just a random user on the internet making bold claims. It should still be taken with a grain of salt, but given everything going on in the gaming industry, it would not be surprising for this to be true.

Gerstmann simply acknowledges the existence and cancellation of the Fallout game before moving on, but it’s worth noting that it’s unlikely to be the Fallout 3 or Fallout: New Vegas remasters. It could be, but recent developments suggest that it may have been an Obsidian-developed Fallout game. The studio made recent headlines with Josh Sawyer discussing an Obsidian Fallout game in a recent interview, which is interesting timing if nothing else.

Most importantly, Bloomberg reporter Jason Schreier recently debunked a report that Obsidian was one of the Xbox studios on the chopping block. Shortly after, he also refuted a separate claim made by VGC’s Jordan Middler, who said he had heard from multiple sources that Obsidian was working on a Fallout game. VGC and Middler are not the types to make up claims online for clout, however.

This is the one that made the least sense to me, especially in the context of the refocusing on big games. Been told multiple times recently they were early on a Fallout project, which is obviously dream stuff for fans. Whether that burned out, or isn’t far enough along, who knows. Brutal.
— Jordan Middler (@jordanmiddler.bsky.social) 2026-07-02T13:58:26.137Z

Now, this is pure speculation, but it’s entirely possible that Middler was told about a Fallout game at Obsidian, it was canceled (and he was not told), and that Schreier knew this was no longer the case. Of course, it could be something else entirely—a brand-new Fallout game that no one would have seen coming, or hoped was, as is seemingly the case at Obsidian—but such reports on this purported Fallout project are unlikely to be confirmed by official sources anytime soon.

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Whatever happens, it’s clear that Xbox is moving in a new direction and Fallout is an important part of it. What that means remains to be seen, but with Fallout 5 set to release after The Elder Scrolls 6, even “faster development” means it’s years away, but smaller-scale games plus remakes would go a long way for the IP if that was once the plan.