Obsidian Entertainment

• 1. Introduction

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  Obsidian Entertainment, the video game developer now based in Irvine, California, once kept Three Clown Software on its shortlist of possible names. Scorched Earth was on the list too. The founders chose Obsidian instead. They found it strong and memorable, and it echoed their old studio, Black Isle. The company began with seven employees, five of them founders. Three of those founders put in between $100,000 and $125,000 of their own money. What followed was a run of games set in other people's universes, a long string of canceled projects, and a brush with closure. How did a team known for sequels come to build its own worlds? And what saved it when the money ran short?

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• 2. Leaving Black Isle

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  Baldur's Gate III: The Black Hound had already been in development for a year and a half when it was canceled. The studio behind it, Black Isle, belonged to Interplay Entertainment, and Interplay's finances were poor. Black Isle had also lost its license to produce Dungeons & Dragons games. Feargus Urquhart and most of the staff were frustrated and dissatisfied. Urquhart came to believe that staying was no longer a "viable option" for the team.

  Black Isle's record made the frustration sharper. The team had made Icewind Dale, Planescape: Torment and Fallout 2. It had also worked with BioWare on Neverwinter Nights, Baldur's Gate and Baldur's Gate II. Most of those games were critical and commercial successes.

  Urquhart was in his early thirties at the time. He feared that, without starting a company soon, he might become too old to do it. In 2003 he left Interplay together with Chris Avellone, Chris Parker, Darren Monahan and Chris Jones. On the 12th of June 2003 the five of them founded Obsidian Entertainment.

  Electronic Arts, Ubisoft and Take-Two Interactive each heard from the new studio, because it needed capital to keep operating. The pitch to Electronic Arts produced no project. Obsidian asked Ubisoft about a Might & Magic game, but Ubisoft contracted Arkane Studios instead, and that project became Dark Messiah of Might & Magic. Take-Two Interactive was pitched Futureblight, described as a Fallout-style game powered by the Neverwinter Nights engine. It was never made. Then, toward the end of 2003, LucasArts came calling.

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• 3. Borrowed Worlds

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  Toward the end of 2003, LucasArts president Simon Jeffrey asked Obsidian for an action role-playing game set in the Star Wars universe. Obsidian answered with a concept built around first-person lightsaber melee combat and established characters such as R2-D2. LucasArts rejected it. Jeffrey asked instead for a follow-up to the BioWare-developed Star Wars: Knights of the Old Republic, since Obsidian's team already knew the technology behind that game.

  Work on Star Wars Knights of the Old Republic II: The Sith Lords began in October 2003, and Obsidian was given 15 months to finish it. The release was first planned for holiday 2004. LucasArts then gave the studio an extension into 2005, before moving the release back to holiday 2004 following the Electronic Entertainment Expo. LucasArts sent some of its own staff to help, yet a number of features were cut because of the time pressure. Modders began restoring them in 2009 and finished in 2012.

  By July 2004, Obsidian employed 27 people, and 18 of them had come from Black Isle. The headcount had been 20 soon after The Sith Lords began. Others arrived from Blizzard Entertainment, Electronic Arts, Taldren, Totally Games, Treyarch and Troika. The studio wanted to develop multiple projects at the same time, and that goal drove the fast expansion.

  Atari, which had acquired the license to produce Dungeons & Dragons games, approached Obsidian before The Sith Lords launched. It wanted a sequel to Neverwinter Nights. Development of Neverwinter Nights 2 began in July 2005 with a team of ten, led by Monahan and Avellone. Obsidian was the lead developer, while BioWare, creator of the original, provided technical assistance. The team eventually grew to about 50 people. Atari agreed to move the target from Christmas 2005 to the 31st of October 2006. Critics received the game generally well, and the expansions Mask of the Betrayer and Storm of Zehir followed in 2007 and 2008.

  Sequels such as these made Obsidian's early reputation, and Urquhart was comfortable with that. His shorthand for the appeal was "get to go play in someone else's world." The studio also believed licensed projects were easier to develop. It treated them as stepping stones toward original games built on its own intellectual property. While Neverwinter Nights 2 was in production, the team was already approaching other publishers about more projects.

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• 4. Projects That Vanished

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  Disney Interactive Studios commissioned Obsidian to build Dwarfs, a prequel to Snow White and the Seven Dwarves, as a third-person action game for the PlayStation 3 and Xbox 360. Work began in 2005. The team had a prototype and a year of development behind it when Bob Iger replaced Michael Eisner as chief executive of The Walt Disney Company. Iger steered Disney in a completely different direction, which made the Snow White franchise "untouchable" and ended the project. Urquhart called the cancellation "heartbreaking" for a team that loved the game.

  In February 2009, Obsidian sent Sega a prototype of Aliens: Crucible, an action role-playing game set in the Alien franchise. It was to feature base-building, dialogue choices and character customization. Three weeks later, Sega canceled it without inspecting the demo. The cancellation was officially confirmed in June of that year.

  Around the same time, Atari asked Obsidian to revive Baldur's Gate III. Obsidian requested a large budget that Atari could not afford. The deal fell apart when Atari Europe was sold to Namco Bandai Games.

  On the 11th of February 2010, Red Eagle Games and Obsidian announced plans to co-develop one or more games based on Robert Jordan's The Wheel of Time novels. On the 25th of April 2014, Urquhart told Computer & Video Games that the agreement had dissolved. Red Eagle had failed to secure the necessary funding.

  In 2011 the studio began a third-person open-world game called Stormlands, rumored to be intended for the then-unannounced successor to the Xbox 360. Microsoft Studios canceled it in 2012, and Obsidian laid off between 20 and 30 people. The team reworked the idea into a game called Fallen and pitched it to 2K Games and Ubisoft. Neither replied, though its ideas would later become the foundation of another Obsidian game. So many cancellations had pushed the studio, by 2012, into a severe financial crisis.

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• 5. Alpha Protocol and New Vegas

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  After Aliens: Crucible collapsed, Sega still wanted to work with Obsidian. It asked for a role-playing game based on a new intellectual property rather than a sequel. The team proposed a "spy RPG". Sega approved the idea, helped fund it and became its publisher. The result was Alpha Protocol, the studio's first original game.

  Alpha Protocol took four years to make and reached stores in June 2010. The team lacked a precise vision. It struggled to decide which gameplay elements to include and who the target audience should be. The game suffered an identity crisis and borrowed from several genres. Sega also made decisions slowly and cut features after they were completed. The results were repeated delays and an excessively long production.

  Reviews were mostly mixed, and the game was a commercial failure for Sega, which put any sequel plans on hold. Urquhart admitted there was room for improvement. Fans kept asking for a sequel anyway, and Urquhart said the team hoped to make Alpha Protocol 2 and "do better". Avellone later explained that Sega owned the rights and that crowdfunding would not suit the project.

  Fallout: New Vegas was in development at the same time, and it reached stores in October 2010. Bethesda Softworks had first approached Obsidian about a Star Trek game, but that idea never gained traction. After Bethesda released Fallout 3 and turned its own attention back to The Elder Scrolls, it asked Obsidian to make another Fallout. Several Obsidian founders had worked on the series at Black Isle. The team studied fan requests, which gave the in-game factions a more prominent role. Bethesda approved the pitch immediately, and work began soon after Aliens: Crucible was canceled.

  New Vegas earned generally positive reviews, and some critics judged it better than the acclaimed Fallout 3. Yet some players could not play at launch because of constant crashes, which were later patched. As with The Sith Lords, which had shipped with crashes and technical issues, the team had not thoroughly tested for bugs. Obsidian called New Vegas a learning experience, since it was the studio's first AAA game and taught it how to manage quality assurance. Between the two games, the studio had earned a reputation for technical problems.

  Determined to change that, the team improved its bug-tracking system for Dungeon Siege III. The game was a sequel to the Gas Powered Games title Dungeon Siege, published by Square Enix. Reviews in 2011 were mixed, but the launch was stable. It was also the first game to run on Obsidian's own in-house Onyx engine. The reception of New Vegas, meanwhile, would carry a financial price that Obsidian felt when its money ran thin.

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• 6. South Park and Near Ruin

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  In October 2009, a phone call from South Park Digital Studios struck the Obsidian team as a prank by another company in the same building. It was real. Obsidian met South Park creators Matt Stone and Trey Parker, and both sides agreed the game had to share the show's construction paper-like look. Viacom, parent of the channel that broadcasts South Park, provided the first funding.

  In 2011, Viacom let the publisher THQ take over the project. THQ soon fell into a financial crisis and went bankrupt in late 2011. An auction was held so other publishers could acquire its titles. Obsidian feared that a canceled game would plunge the studio into severe difficulty too. Ubisoft acquired the game, and South Park: The Stick of Truth was released in March 2014.

  Even with The Stick of Truth finished, Obsidian's finances were precarious. The studio received only a small "kill fee" for an unannounced game codenamed North Carolina. It had also lost its Fallout: New Vegas bonus. Bethesda's standard was an aggregate Metacritic score of 85, and the game missed it by 1 point. Adam Brennecke, an executive producer, said that if the studio failed to pitch a project to a publisher in time, it would have run out of money and gone bankrupt.

  Josh Sawyer, creative director of New Vegas, proposed putting a canceled game on Kickstarter, then growing in popularity. Some team members were skeptical and feared the studio might not even raise $100,000 there. Debates among key members of the company continued until the Double Fine Adventure campaign launched and saw huge success. After that, the question was which game to ask backers to fund.

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• 7. The Kickstarter Gamble

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  In September 2012, Obsidian launched a Kickstarter campaign under the working name Project Eternity and asked for $1.1 million. The project was a spiritual successor to Baldur's Gate, a game the team had wanted to make for a very long time. The studio's mindset was that success could turn the game into a franchise, while failure would mean refining its ideas and trying another campaign. The campaign raised $4 million and broke the record set by Double Fine Adventure.

  Pillars of Eternity, a role-playing game played from an isometric perspective, was released in March 2015 to positive reviews, with Paradox Interactive as publisher. Its success saved the studio from closure. The expansion The White March came in two parts, on the 25th of August 2015 and the 16th of February 2016. A board game, Pillars of Eternity: Lords of the Eastern Reach, was announced on the 19th of May 2015. Zero Radius Games developed it with input from Obsidian, and its own Kickstarter reached its funding goal within a day. The studio had come to use Kickstarter as an indicator of whether a game or genre was popular.

  InXile Entertainment, like Obsidian, was founded by former Interplay employees. The two companies kept a friendly relationship and signed an agreement to share technology. Obsidian helped build Wasteland 2 after its Kickstarter raised $2.1 million. The game appeared in late 2014 to generally positive reviews.

  In June 2015, co-founder Chris Avellone announced his departure from Obsidian. That August, Obsidian joined inXile and Double Fine in launching Fig, a funding site that aimed to offer "equity crowdfunding" for video game projects only. Urquhart sat on its advising board, and Obsidian planned to use Fig for future campaigns.

  Tyranny was announced on the 15th of March 2016 as an isometric RPG set in a world where evil has already won. Paradox Interactive published it. Its roots lay in a 2006 concept called Fury, set in "a world that had been laid waste by a magical apocalypse". Fury became Defiance, whose concept resembled Tyranny, and Defiance's ideas joined those of other projects in Stormlands. After Stormlands was canceled, the studio reconsidered Defiance's original idea. In April 2016, Leonard Boyarsky joined Obsidian, the second Troika Games co-founder to work there.

  On the 27th of January 2017, Obsidian announced Pillars of Eternity II: Deadfire and opened a campaign on Fig. The project reached its funding goal in less than a day and was released in May 2018. Later in 2018, Obsidian would announce a new owner.

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• 8. Own Worlds Under Microsoft

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  On the 10th of November 2018, Obsidian announced that Microsoft had acquired it, making the studio part of Microsoft Studios, now known as Xbox Game Studios. At The Game Awards in December 2018, it unveiled a new intellectual property called The Outer Worlds. The action role-playing game is set in an alternate future where megacorporations colonize and terraform alien planets. Asked how many Fallout: New Vegas veterans worked on it, Urquhart answered 20%. For the original Fallout games, his answer was 2%. The Outer Worlds was released on the 25th of October 2019 for Windows, PlayStation 4 and Xbox One, with a Nintendo Switch version on the 5th of June 2020.

  In November 2019, Obsidian announced Grounded, which it described as a "survival adventure where you're the size of an ant". On the 23rd of July 2020, at the Xbox Games Showcase, it revealed Avowed, a role-playing game for Windows and Xbox Series X. In 2021, a technical artist job posting exposed another unannounced open-world project for PC and console. The Xbox + Bethesda E3 2021 showcase revealed it as The Outer Worlds 2. In 2022 came Pentiment, a narrative adventure with a November 2022 release window, directed by Josh Sawyer, who had directed New Vegas. Under Microsoft, the studio kept making triple-A role-playing games and also took on smaller projects, including Grounded and its sequel.

  Before the acquisition, Obsidian was independent and believed it had to react quickly to market changes. Role-playing games driven by characters remained its core, yet it was willing to try smaller projects in other genres. Armored Warfare, a tank game for My.com announced in mid 2014, was one result. It launched in open beta during 2015, and in February 2017 Obsidian left its development in the hands of the publisher. On the 13th of August 2014, the studio had licensed the Pathfinder Roleplaying Game for electronic adaptations, starting with a tablet version released for iOS and Android in April 2016. In July 2015 it was also working on the localization of Skyforge. Urquhart had said he wanted to work with BioWare again on a new Star Wars game.

  The move toward original games gave Obsidian more creative freedom and freed it from the constraints publishers imposed. Inside the studio sat a small reminder of where it began. An arcade cabinet housed a dungeon crawler built around the story of the five founders.

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