Jeff Grubb Claims Microsoft Seriously Considered Selling or Shutting Down Obsidian During Xbox Restructuring

Industry insider Jeff Grubb has claimed that Microsoft seriously discussed the possibility of selling or closing Obsidian Entertainment during its recent internal restructuring of the Xbox division. Speaking on the latest episode of Game Mess Decides, Grubb said conversations about Obsidian's future were taking place inside Microsoft, although the studio ultimately avoided those outcomes. Importantly, Microsoft has not officially confirmed these claims.

According to Grubb, the confusion surrounding recent Xbox rumors stems from how quickly decisions were changing behind the scenes. He explained that proposals involving studio closures, sales, and reorganizations were reportedly being discussed and revised within a matter of hours rather than weeks. In Obsidian's case, Grubb said his sources indicated that both a potential sale and a shutdown were considered before Microsoft decided to keep the studio within Xbox.

The reported discussions come amid a broader restructuring of Microsoft's gaming business. In recent weeks, multiple reports have suggested the company has been evaluating major changes across Xbox, including studio reorganizations, cost-cutting measures, and even long-term structural options such as spinning Xbox into a separate subsidiary. However, Microsoft has publicly confirmed only parts of its wider restructuring and has not commented on the specific reports involving Obsidian.

Founded in 2003, Obsidian Entertainment is one of Xbox's most respected RPG studios, known for titles including Fallout: New Vegas, Pillars of Eternity, The Outer Worlds, and Avowed. If Grubb's information is accurate, the studio narrowly avoided a dramatic change in ownership or an even more uncertain future. For now, though, these claims remain unverified reports from industry sources rather than confirmed Microsoft plans, and there is no indication that Obsidian is currently being sold or shut down.