Obsidian Update: New Reports Claim Xbox Considered Options, Not Closure Yet

Rumors swirling around Obsidian’s future took another turn after a pair of conflicting reports about Xbox shutting down studios during upcoming layoffs. The initial claim placed Obsidian among the studios being considered for closure, but it was quickly challenged by journalist Jason Schreier. Now a third voice—reporter Jeff Grubb—has offered additional context that may help explain how two very different stories ended up circulating so quickly.

Key takeaways

• Obsidian was reported as potentially facing closure in connection with Xbox layoffs, then that claim was contested soon after.
• Jeff Grubb says Obsidian was on Xbox’s radar, but the window of concern was short.
• Grubb attributes the confusion to how fast Xbox is making these decisions—hours instead of the longer timelines used in the past.
• He claims even some Xbox employees weren’t aware of major publishing or platform decisions until after they became public.
• Grubb ultimately frames the situation as chaotic, with Obsidian sounding like it’s been spared.

Why two reports about Obsidian didn’t line up

Grubb addressed the discrepancy during a discussion on his YouTube channel, focusing specifically on why the earlier reporting and Schreier’s follow-up didn’t match.

He opened by defending the original report from Chris Dring of The Game Business, pushing back on the idea that it was invented. Grubb said he checked what was circulating and that the information was indeed moving inside Microsoft.

In Grubb’s telling, the chatter wasn’t coming from random corners or unrelated outlets; it was the kind of internal rumor that suggested something was happening. He also said he had not seen other reporters repeating the same detail, which makes the mismatch even more confusing.

Grubb then suggested the timeline may be the real culprit. He described events around Obsidian as having moved quickly, adding that it may not have been as clear-cut as “definitely being shut down,” even if it wasn’t treated as permanently untouchable. He also pointed out that Schreier’s clarification didn’t frame the studio as guaranteed safe from the start—Schreier instead emphasized that there were no negotiations and that Obsidian is safe now.

Xbox’s rapid decision-making, and the fallout inside the company

To explain why employees and observers could end up with different understandings, Grubb argued that Xbox’s current approach to decisions has become so fast that even staff can’t stay aligned. He claimed the company is making calls within a 24-hour window—something that, in the past, would have taken weeks or months.

He also tied this urgency to top-level leadership moving quickly. Grubb specifically referenced Asha Sharma, CEO, saying she is turning these situations around immediately rather than allowing a slower process to play out.

As an example, Grubb said some Xbox workers were unaware that Gears of War: E-Day would become an Xbox console exclusive until the announcement reached the public. He noted that the decision appears to have been made late, even if Xbox denies that timing.

Wrapping up his comments, Grubb characterized the current state of Xbox decision-making as a “f**king clown show,” with employees still unsure which studios will be caught up in the layoffs. For Obsidian, though, his message was that it at least sounds like the studio is safe—for now.