Layoff-blasted Fallout game studio announces it's building Fallout 5 from the rubble

This is per a new report from Bloomberg News‘ Jason Schreier, who talked to Bethesda studio head Todd Howard about the plans to push forward with with what will inevitably be a monumental project, despite Bethesda now working with a recently gutted staff. The studio was one of several Microsoft-owned studios to be targeted in layoffs that ultimately affected some 1,600 employees in its Xbox gaming division, including its sister studio, ZeniMax Online Studios, which develops the online version of the studio’s popular Elder Scrolls franchise. It sounds like Bethesda was hit slightly less hard than some other Xbox studios—Schreier’s report notes that it lost “dozens” of staff, as opposed to the hundreds laid off at other teams—but it’s still kind of wild that the studio is publicizing that it’s embarking on one of the biggest games in its history at this exact, “Please don’t look too closely at the wreckage” moment.

To be fair, Fallout is having a watershed moment right now, as Prime Video’s TV adaptation has helped build interest in its post-apocalyptic satire of American life. (Even as Microsoft has had nowhere “new” to filter incoming players besides Bethesda’s very messy online game Fallout 76.) That renewed interest—and the fact that Fallout 5 will take many years to complete—presumably helps explain why Bethesda has also recently tapped its fellow Microsoft subsidiary Obsidian Entertainment to craft a new game in the universe, scheduled to arrive well ahead of Fallout 5. (Obsidian—which also lost a big chunk of its staff in these layoffs, and was reportedly ordered to move off of projects focused on its own original IP—was founded by many of the people who made the first few Fallout games, before Bethesda revived the franchise with the blockbuster Fallout 3; the studio last touched the franchise with 2010’s Fallout: New Vegas, a cult favorite that served as the plot inspiration for the most recent season of the show.) 

Howard, who’s been with Bethesda since it was a plucky little independent studio making groundbreaking computer RPGs like The Elder Scrolls: Daggerfall, called the recent layoffs “really tough.” (The crowds of protestors who’ve gathered around the company’s studios over the last week to protest the layoffs would presumably agree.) Although the studio’s primary focus right now is The Elder Scrolls VI—with no release date yet set—Howard tried to put a nice, corporate-friendly spin on the basic fact of a reduced Bethesda workforce gearing up for not just one but two absolutely huge releases: “We’re going through a change,” Howard euphemized, “So that we focus best on the franchises and what we need to do to deliver for everybody.”