Obsidian CEO responds to worries Xbox could shut them down, too: 'I'm not worried about tomorrow'

A gray cloud loomed over this year's big summer game showcases: Over 16,000 game developers have lost their jobs since 2023, many of whom were casualties of success at companies that reported huge profits this year. One of the largest cost cutters has been Xbox, which in January cut 1,900 jobs at Activision Blizzard and in May shut down four studios: Tango Gameworks, Arkane Austin, Alpha Dog Games, and Roundhouse Games. The closure of Tango was taken especially hard, as the studio was still basking in the light of Hi-Fi Rush, a critical and commercial success by all of Microsoft's metrics.

To developers, the unexpected closures sent a clear message: Making good, profitable games is no longer good enough. Public trust in Microsoft as stewards of the studios it spent years gobbling up has been shaken—what beloved, storied studio will Xbox suddenly decide to shut down next?

Hours after Microsoft's dazzling June showcase that debuted a new Doom, Perfect Dark, and Gears of War, PC Gamer sat down with Obsidian CEO and founder Feargus Urquhart, who premiered a new Avowed trailer during the show, to get his perspective on layoffs and Xbox ownership in 2024.

"It's just horrible," Urquhart said of Xbox's recent closures and layoffs. "At Obsidian we had to go through three layoffs [before being acquired]. They're right behind my parents' deaths as some of the worst days I've ever had, so no, these are just not great things."

Obsidian was one of the earliest acquisitions of Xbox's spending spree, joining the company in 2018. The beloved RPG maker has released two games under the Xbox label (Grounded and Pentiment) and is preparing to launch another. Urquhart knows that some fans are worried about what could happen to Obsidian in the current Xbox climate.

"Everything that's happened over the last six months with layoffs and the pinnacle of this stuff with Tango and Arkane and the other studios, it really has made people worried, and shaken," Urquhart said. "I think we just try to say 'Hey, this is what we're working on today, and we believe in it.' I'm not saying that [Tango and Arkane] didn't believe in what they're doing, but we just keep our heads down and move forward and say we're working on great games. We're working on Avowed, we're working on Outer Worlds 2. It's probably not a surprise—we have other stuff we're thinking about and looking at doing."

When asked if he still believes in Xbox as a good steward of its many acquired studios, Urquhart replied with an unqualified "Yes."

Urquhart said he's been encouraged by recent talks with other Xbox studio heads. They "talk a lot," in group chats and in person when possible, he said. With all of Xbox gathered in Los Angeles over the weekend, he described having dinner with around 14 other studio leaders.

"I think when we all talk, it's probably a good thing that we're all talking this way," Urquhart said, gesturing with forward motion. "You know, we're talking about the future and what we're accomplishing."

I put it another way: Obsidian is not watching its back?

"No, we're not watching our backs.

"Obviously there's been all this stuff that's going on, but I always go back to the conversation I had with Matt [Booty, head of Xbox Game Studios] in July of '18, as we just started the acquisition conversation," he said. "I don't feel like I have any different directive today than I did back then."

If anything has changed for Urquhart, it's that there are a lot more games competing for attention, and that adds "a little bit more pressure" to make better games.

"We're saddened by what happened. But as long as I'm doing my job, and doing it well, I'm not worried about tomorrow."

But Urquhart does think much further ahead, about what will happen to Obsidian after he's gone. "Me and my partners, we started Obsidian. And even though we sold it, it matters to me. Here's a shock: I probably won't be running Obsidian in 15 years," Urquhart laughs, "because I'll be almost 70. But I want Obsidian to be there."

Right now, Urquhart is focused on finishing his company's next big RPG, Avowed. He plans to share a solid release date soon, but 2024 is a lock.