Rumours swirled earlier this week that Avowed 2 may have been cancelled at Obsidian Entertainment, but the truth is much more nuanced than that. The speculation emerged amid a turbulent period for Xbox, as Microsoft's gaming division looks to cut ties with some of its most beloved studios.
The Origin of the Rumours
The Avowed 2 cancellation rumours started on Wednesday, June 17 when notable industry insider Nick Baker retweeted an article from Spanish gaming website Generacion Xbox, which reported that the sequel is reportedly in development. Baker, co-founder of the XboxEra podcast, retweeted the article with a South Park gif reading 'And it's gone'. With the post made around the same time as reporting of other Xbox studio closures, it quickly gained traction, leading gamers to assume Obsidian's next project was done for.
Over on Reddit, a post read: 'Shpeshal_Nick indicates Avowed 2 may have been cancelled.' It quickly gained hundreds of upvotes. However, Baker was quick to clarify his initial post, indicating it was made as a joke rather than any indication of insider knowledge. In a later post on X, he wrote: 'Uh…what the f**k. No I wasn't. That was just a smart ass joke tweet.'
What's Going on at Xbox?
Earlier this week, Bloomberg reported that Xbox is allegedly looking to part ways with several of its own studios. Staff at Ninja Theory were informed of the news on Monday, with the studio now looking to find a buyer. The news was a huge shock for both Xbox staff and gamers, arriving less than two weeks after the announcement of its next big game, Senua. It's now unclear whether that project will ever see the light of day.
These changes are all part of what CEO Asha Sharma is calling 'XBOX Reset'. In a statement to employees, she wrote: 'We won't succeed by hiding hard truths, nor will we succeed by doing the same thing and expecting different results. Like the 'everyday wins' mentality from the first 100 days, we will sprint to make progress against hardware, content, experience, and services together.'
Is Avowed 2 Actually Cancelled?
We can't know for sure whether Avowed 2 is officially cancelled, as Obsidian Entertainment hasn't publicly acknowledged it's even working on the project. Obsidian had a huge year in 2025 with Avowed launching in February, Grounded 2 early access in July, and The Outer Worlds 2 in October. Sales numbers for each game aren't clear as they launched directly to Xbox Game Pass, though it's thought that 5.9 million players tried Avowed, with a PlayStation 5 release arriving a year later in 2026.
Set in Obsidian's Pillars of Eternity universe, there was a clear fondness for Avowed's take on the first-person fantasy RPG formula, achieving a Metacritic score of 80. While we'd love to see a sequel build on these foundations, time will tell if Xbox feels the same way and keeps the studio alive long enough to see another project through to completion.
