Obsidian's Next Fallout May Use Creation Engine 3.0 Future

New reports, developer comments, and Xbox rumors suggest Obsidian's next Fallout could arrive far sooner than expected, while Halo and Rise: Son of Rome headlines add to this week's biggest gaming stories.

Obsidian Entertainment has returned to the limelight, with a new wave of gaming allegations claiming the studio is leading production of the next Fallout game. Microsoft and Bethesda have yet to make an official announcement about the project. Still, recent statements from current and former personnel have sparked fresh speculation about what the long-awaited RPG would look like, which engine it might use, and whether Obsidian can replicate the success of Fallout: New Vegas.

This conjecture only grew more intense when journalist Jason Schreier stated that Obsidian was working on a new Fallout title. The revelation immediately rekindled questions about whether the studio that made Fallout: New Vegas in 2010 still has it in them to make another beloved entry in the genre.

The last round of layoffs at Microsoft has just added fuel to the fire, with some reviewers questioning if Obsidian is still the same firm that earned its reputation on critically acclaimed role-playing games. Veteran Obsidian director Brandon Adler publicly supported the developer in response, saying that most of the online discussion has been driven by falsehoods rather than reality.

Adler says the studio has grown organically over the past two decades.

However, many of its creative leads are still the same creators who worked on Fallout: New Vegas, The Outer Worlds, Pillars of Eternity, and other iconic RPGs. He stressed that studios change constantly, but the underlying creative idea, or “DNA”, at Obsidian stays the same. But not everyone is that confident. Former Obsidian writer Chris Avellone has questioned the quality of recent works from both Obsidian and Bethesda, saying many of the developers who helped define the firm are gone.

Avellone referred to internal employment changes over the years, saying that a small percentage of the executive team from the New Vegas days remains. But his primary concern isn’t staffing numbers. It’s storytelling. Avellone thinks that the newer Bethesda RPGs have failed to create the unique characters and engaging stories that made the older Fallout games so famous. To him, outstanding writing is still the distinguishing aspect of the franchise, and everything new is mostly about great companions, great factions, and great adventures.

However, despite those concerns, Avellone is not participating in the purported project. Instead, sources claim Fallout: New Vegas veterans, including Tim Cain, John Gonzalez, and Josh Sawyer, could have important involvement in crafting the next Fallout experience. Their involvement has generated hope among long-time fans of the series for a return to the franchise’s classic RPG roots.

The engine is perhaps the largest technological concern surrounding the project. Given Obsidian's history with titles like The Outer Worlds, The Outer Worlds 2, and Avowed on Unreal Engine, Fallout was widely expected to be no different.

But recent comments from Josh Sawyer imply the answer isn't that simple. While the Creation Engine has often been criticized for its age and technical limitations, Sawyer commended Bethesda’s internal tools, calling them extraordinarily efficient for rapidly producing large-scale RPGs. The engine’s robust workflow and scripting features enable veteran developers to build huge volumes of content at an astounding speed, he said.

Getting to grips with the engine takes considerable expertise, admits Sawyer, but once developers know their way around the tools, it’s incredibly good at building huge, interconnected worlds.

Bethesda still keeps several of its core systems under wraps, like the technology behind persistent world item tracking.

That stubbornness is one of the core gameplay aspects of Fallout. Thousands of goods can be left exactly where players leave them, quests can branch out over hundreds of hours of gaming, and innumerable world interactions are forever recorded. These features are so baked into the architecture of Creation Engine that it would be difficult to recreate them elsewhere without major redevelopment.

Unreal Engine 5 is the latest and greatest in terms of visuals, but graphics aren’t the only thing that determines how a game looks. It’s the art direction, quality of assets, lighting, and character design that make a game look realistic at the end of the day. Obsidian has always been more about stylized visuals, but a modern Fallout could need to seem closer to Starfield than The Outer Worlds.

Perhaps Obsidian is doing something like Fallout: New Vegas, recycling and modifying Bethesda's current technology instead of building everything from the ground up. Using Starfield's assets, systems, and tools would save significant production time while preserving Fallout’s hallmark gameplay. Bethesda is reportedly already working on Creation Engine 3.0, which will power The Elder Scrolls VI. The improved engine is said to enhance lighting, procedural generation, and one of the longest-running issues in Bethesda RPGs – lengthy loading screens.

The latest versions of Creation Engine have already introduced huge enhancements over previous versions, including real-time global illumination, volumetric lighting, and improved world-building systems. In the future, enhancements will enable considerably larger seamless surroundings with fewer interruptions while entering a building or navigating between areas.

If Obsidian is working hand-in-hand with Bethesda on the rumored Fallout project, it may immediately profit from these improvements, while preserving the sophisticated quest systems and persistent world simulation that have marked Bethesda's RPGs for so long. Another possible advantage is the speed of development.

Unlike Bethesda’s long release timetable that might push Fallout 5 well into the next decade, the suspected Obsidian project has apparently been in early production since 2022 or so. If true, this would mean the game might already be many years into production, making a revelation within the next two years even more likely.

While Microsoft has yet to officially confirm any of those aspects, the involvement of seasoned Fallout veterans and improvements to the engine tech have generated considerable interest among RPG aficionados. Elsewhere in Microsoft’s gaming plans, recent rumors indicate that Xbox could be pivoting away from its multiplatform approach.

Insider allegations mentioned this week say Halo Campaign Evolved will continue on track for PlayStation because it would be impractical to turn around, given existing marketing commitments, license agreements, and pre-orders.

But Halo games could be Xbox exclusives again down the road. According to sources, Microsoft is looking to improve its hardware ecosystem, including next Xbox platforms, by keeping important first-party properties like Halo as exclusive experiences. If accurate, it would mean that future mainline Halo entries, spin-offs, and remakes would no longer ship on PlayStation.

Industry critic Jez Corden has also indicated that this strategy could eventually extend beyond Halo, with additional major Xbox properties potentially remaining exclusive after already-announced multiplatform releases are completed. However, Microsoft has made no formal comment on any change to its publishing approach.

Expect the first indications of how the modernized release is received to come from the impending reviews for Halo Campaign Evolved, especially for PlayStation fans who might only get to play this one installment.

Also this week, another Xbox franchise returned to the spotlight with new talk about Ryse: Son of Rome. Released alongside the Xbox One in 2013, Crytek's Roman action game was originally intended to be the beginning of a much larger franchise. Microsoft was said to view the property as a potential long-term blockbuster, with numerous sequels possible.

Rather, the title received mixed reviews from critics and failed to sell enough to warrant further funding. While the franchise did quietly fade away, it has slowly but surely become a cult classic thanks to its cinematic presentation and outstanding visuals. There have been no official statements, but the series has never been officially discontinued. Theoretically, Crytek or Microsoft may always return to the franchise, but their attention seems to be elsewhere for now.

Sure, Ryse wasn’t perfect, but a lot of fans still think it had a lot of potential. The movie-quality fighting, historical context, and graphic fidelity gave us a solid foundation to work from, but with a second game, this might have been far more ambitious. It's unclear whether Microsoft’s current leadership has any interest in reviving the property, but the game still has fans who feel it deserves another go.

As the summer gaming schedule winds down, the focus is turning to projects that could define the next generation of Xbox exclusives. Arguably, the rumored Fallout project has the most expectations of these. If Obsidian is really leading production with veterans like Josh Sawyer and Tim Cain participating, and Bethesda’s changing Creation Engine can modernize the experience while keeping the characteristic mechanics of Fallout, the series might be primed for one of its biggest comebacks in years.

For now, fans will have to wait for formal confirmation from Microsoft, Bethesda, or Obsidian before they can separate speculation from truth. Until then, the argument around the future of Fallout, and the future of Xbox’s biggest properties, shows no sign of easing.