XBOX Reportedly Orders Bethesda to Prioritize Fallout and Elder Scrolls After Major Layoffs

Bethesda and ZeniMax have reportedly been hit with some of the biggest cuts across XBOX Game Studios, and those changes could dramatically reshape what you see from the publisher over the next several years. Following layoffs said to affect around 20% of employees across Bethesda's five major studios, XBOX leadership is reportedly shifting the company's priorities toward the franchises that continue to generate the biggest returns. That means Fallout and The Elder Scrolls are now at the top of the list.

According to the latest reports and industry chatter, XBOX CEO Asha Sharma has directed Bethesda to combine resources and accelerate development on its biggest series. Alongside Fallout and The Elder Scrolls, franchises such as Doom, Wolfenstein, and Quake are also considered key pillars going forward. With resources being redirected, several existing projects could slow down while others receive much greater attention.

At the same time, rumors continue to circulate about Todd Howard's future. 

While some believe he may be approaching retirement after one more major game launch, another possibility is that he could gradually step away from leading game development and instead focus more heavily on the Fallout television series. The show has become one of Bethesda's biggest successes outside gaming and is already moving ahead with its third season.

One of the biggest consequences of Bethesda's reported restructuring could be its long-running live-service games. With Fallout and The Elder Scrolls now becoming the company's primary focus, there is growing speculation that The Elder Scrolls Online, now entering its twelfth year with millions of players, may begin winding down. Meanwhile, Fallout 76 continues to receive support despite its difficult launch years ago.

According to Bethesda insider King Fan Man, Fallout 76 has evolved into a completely different experience from its original release. The game is reportedly preparing for a full current-generation update across XBOX Series X|S, PlayStation 5, and PC, bringing improved graphics, better performance, and visual upgrades throughout the game.

However, Fallout 76 has also been cited by many fans as one reason Fallout 5 has taken so long to enter full production. 

Under the reported new XBOX strategy, some of the developers currently maintaining Fallout 76 and The Elder Scrolls Online could eventually transition toward helping build the next mainline Fallout title instead.

Much of this lines up with Bethesda's leaked 2022 internal roadmap. While several projects slipped by one or two years due to the pandemic, many of the games listed on that roadmap have already been released or officially announced. The remaining projects now appear to fit neatly into XBOX's renewed focus on Bethesda's most recognizable franchises.

One project that refuses to stay secret is Project Platinum, believed to be a remaster of Fallout: New Vegas. With the Fallout TV series heading to New Vegas for its second season, excitement surrounding the classic RPG has only continued to grow.

Virtuos Studio, the developer behind the recent Oblivion Remaster, is reportedly handling the project. 

Instead of fully remaking the game, the studio will probably just slap Unreal Engine 5 visuals on top of the existing Creation Engine framework, meaning the classic gameplay systems, quirks, and memorable moments will mostly remain intact but with a major boost in presentation.

The reported remaster would also update combat, aiming, movement, and controls, giving one of the franchise's most beloved entries a much-needed refresh. With Virtuos employing well over 1,000 developers, current expectations suggest that Fallout: New Vegas Remaster could arrive sometime in 2027.

Fallout 3 Remaster is also believed to be in development at Virtuos. This project would be similar in that it would revisit the Capital Wasteland with the visuals of Unreal Engine 5, and Bethesda’s original game systems.

For many players, Fallout 3 marked the series' transformation into the first- and third-person RPG fans know today. Revisiting its locations, characters, and story with modern visuals has become one of the most requested projects in the franchise.

Some insiders believe both Fallout remasters were originally slated for 2026 before technical issues with the Oblivion Remaster delayed Bethesda's broader release plans. 

Rather than rushing them out, the company may now be polishing both games further before launch. There is also speculation that one of the remasters could release alongside the third season of the Fallout television series.

Not every project appears to have a bright future. Marvel Blade, Arkane's licensed superhero game, is reportedly facing significant internal problems. Sources cited in the discussion claim the project has struggled throughout development, with Arkane requesting another one to two years of work that would push the release into 2028. 

XBOX is reportedly becoming less interested in expensive licensed games that require six or seven years of development while also paying Disney licensing fees. Bringing in another development partner has even been suggested as one possible way to finish the project if it remains alive.

Those reported issues naturally raise questions about Dishonored 3. Although previous roadmap leaks hinted at another entry sometime around 2026 or 2027, the future of the franchise now appears uncertain. Dishonored has sold an estimated five to six million copies across the series, respectable numbers but still well behind Bethesda's larger franchises. As a result, another sequel no longer appears guaranteed.

The Elder Scrolls VI remains Bethesda's biggest long-term project. Current estimates place release somewhere between late 2027 and 2029.

Todd Howard has repeatedly stated that he wants to fully reveal the game close to launch rather than years in advance. Reports from people said to be familiar with development claim much of the game's core content is already complete, with additional Bethesda studios gradually joining the project to help finish production.

That timeline isn't universally accepted, though. Bloomberg's Jason Schreier recently suggested The Elder Scrolls VI is still at least two years away, leaving many fans cautious about expecting a release anytime soon after waiting so many years already.

Still, with XBOX reportedly concentrating resources across Bethesda, MachineGames and id Software could assist in bringing The Elder Scrolls VI across the finish line more quickly. Numerous leaks have already discussed the possible setting, world design, and gameplay systems, although Bethesda itself has yet to officially reveal those details.

Meanwhile, id Software is reportedly facing its own challenges after losing around half of its employees through recent restructuring. That means Doom may temporarily slow down despite the franchise recently receiving Doom: The Dark Ages and its new DLC.

Even so, XBOX reportedly sees another legendary shooter waiting in the wings. Quake appears to be the next classic franchise lined up for a major revival.

The reported reboot would aim to preserve Quake's dark atmosphere while modernizing its gameplay for current hardware. Medieval environments, demonic enemies, brutal weapons, and fast-paced arena multiplayer remain central to the franchise's identity, and XBOX reportedly believes the series can once again become a major multiplayer success.

MachineGames also appears ready to return to Wolfenstein. After delivering Indiana Jones and the Great Circle, the studio is reportedly shifting back toward Wolfenstein 3, which is expected to conclude B.J. Blazkowicz's story.

The series has steadily improved with every release, refining its visuals, gunplay, and signature dual-wielding combat. Current reports suggest Wolfenstein 3 could be fast-tracked to launch during the beginning of the next console generation while also aligning with a planned television adaptation.

Of course, the project many fans continue waiting for is Fallout 5.

Reports claim Todd Howard paused an earlier Fallout spin-off project in 2025, but XBOX's new leadership has since approved broader collaboration between Bethesda Game Studios and Obsidian Entertainment on the franchise.

Some fans remain skeptical after mixed reactions to The Outer Worlds and Avowed, but Obsidian also recently brought Fallout creators John Gonzalez and Tim Cain back into the studio. Although both developers publicly denied working directly on the next Fallout, many believe the studio has still been assigned some role within the franchise.

Current reports increasingly point toward Obsidian assisting with Fallout 5 itself rather than a smaller spin-off. Development would reportedly use Bethesda's upgraded Creation Engine 2.0 while remaining under Bethesda Game Studios' overall direction.

The updated engine is expected to significantly reduce loading screens while delivering a much more visually detailed version of the Fallout universe.

Very little is known about Fallout 5's setting, but Todd Howard has previously hinted that the game connects directly with the Fallout television series. If XBOX truly wants to capitalize on that success, the company appears determined to bring Fallout 5 to players much sooner than many originally expected, instead of letting another decade pass between entries.

Despite the excitement surrounding these reported plans, the restructuring comes with a heavy cost. Hundreds of employees across Bethesda and ZeniMax have reportedly lost their jobs during the latest wave of cuts. Those teams helped produce much of XBOX's first-party lineup throughout this console generation, making the layoffs especially difficult to see.

Still, XBOX's reported strategy appears focused on concentrating resources behind Bethesda's strongest franchises instead of spreading development across a larger number of projects. If those plans ultimately hold together, you may end up seeing Fallout, The Elder Scrolls, Quake, and Wolfenstein arrive much more regularly than they have in the past, while several smaller or riskier projects quietly fade into the background.