Obsidian Entertainment, Inc. is an American video game company located in Irvine, California. It is part of Xbox Game Studios. The company was created in June 2003, just before Black Isle Studios closed. It was founded by former Black Isle employees: Feargus Urquhart, Chris Avellone, Chris Parker, Darren Monahan, and Chris Jones.
Obsidian has made both original games and sequels based on licensed properties. Early projects included Star Wars: Knights of the Old Republic II: The Sith Lords and Neverwinter Nights 2, which followed games developed by BioWare. In 2010, the team released its first original game, Alpha Protocol. Other well-known games from Obsidian include Fallout: New Vegas, Dungeon Siege III, and South Park: The Stick of Truth, all of which are based on licensed properties.
Over time, many of Obsidian’s projects, such as Futureblight, Dwarfs, Aliens: Crucible, and Stormlands, were canceled. These cancellations caused the company to face serious financial problems in 2012. To solve this, Obsidian raised money from the public to fund its next game, Pillars of Eternity, a role-playing game with an isometric view. This game was successful and helped the company avoid closing. Afterward, Obsidian shifted its focus to creating original games based on its own ideas, including a sequel to Pillars of Eternity and The Outer Worlds.
In November 2018, Microsoft bought Obsidian Entertainment, and it became part of Xbox Game Studios. Under Microsoft, the company continued working on large-scale role-playing games like Avowed and The Outer Worlds 2. It also began making smaller games, such as Pentiment, Grounded, and a sequel to one of these games.
History
Obsidian Entertainment was started by Feargus Urquhart, Chris Avellone, Chris Parker, Darren Monahan, and Chris Jones on June 12, 2003. Before creating Obsidian, these people worked at Black Isle Studios, which was part of Interplay Entertainment. At Black Isle, they made several role-playing games, including Icewind Dale, Planescape: Torment, and Fallout 2. They also helped create Neverwinter Nights, Baldur's Gate, and Baldur's Gate II with BioWare. These games were very popular and well-received, but Interplay had money problems and lost the right to make games based on Dungeons & Dragons. This led to the cancellation of Baldur's Gate III: The Black Hound. Urquhart and many team members were upset because the game had already been in development for 18 months. Urquhart believed staying at Black Isle was no longer a good choice for the team. He was in his early 30s and thought he might be too old to start a new company if he waited. In 2003, Urquhart left Interplay with Avellone, Parker, Monahan, and Jones and started Obsidian Entertainment that same year.
When Obsidian was created, there were seven employees, including the five founders. Parker, Urquhart, and Monahan invested between $100,000 and $125,000 in the company. The team had a list of possible names for the company, including "Scorched Earth" and "Three Clown Software." They chose "Obsidian Entertainment" because it felt strong, memorable, and similar to the name of their old studio, Black Isle.
After starting the company, Obsidian needed more money to keep operating. They asked Electronic Arts for help, but no project was created. They also contacted Ubisoft to make a Might & Magic game, but Ubisoft chose another studio, Arkane Studios, for that project. Obsidian proposed a game called Futureblight to Take-Two Interactive, which was described as a Fallout-style game using the Neverwinter Nights engine. However, Futureblight was never made.
In late 2003, LucasArts president Simon Jeffrey asked Obsidian to make an action role-playing game set in the Star Wars universe. The team suggested a game with first-person lightsaber combat and featuring characters like R2-D2, but this idea was rejected. Instead, Jeffrey asked Obsidian to create a follow-up to Star Wars: Knights of the Old Republic, a game developed by BioWare. The partnership was finalized in late 2003, and development of Star Wars Knights of the Old Republic II: The Sith Lords began in October 2003. Obsidian had 15 months to develop the game, which was originally set for a 2004 holiday release. LucasArts extended the deadline to 2005, but later moved it back to 2004 after the Electronic Entertainment Expo. LucasArts sent staff to help, but time limits forced the team to cut some features. The game had technical problems and was not fully polished, but it received positive reviews from critics. Some missing features were later added by fans in 2009 and completed in 2012.
From the start, Obsidian aimed to work on multiple projects at the same time, which led the company to grow quickly. After The Sith Lords began development, the team expanded to 20 employees. By July 2004, the team had 27 members, including 18 from Black Isle and others from Blizzard Entertainment, Electronic Arts, Taldren, Totally Games, Treyarch, and Troika.
Before The Sith Lords launched, Atari contacted Obsidian. Atari had the rights to make Dungeons & Dragons-based games and asked Obsidian to create a sequel to Neverwinter Nights, which became Neverwinter Nights 2. Development began in July 2005 with a team of 10 people. Monahan and Avellone led the project, with BioWare providing technical help. The team grew to about 50 members during development. Atari allowed the release date to be moved from Christmas 2005 to October 31, 2006. Neverwinter Nights 2 received generally positive reviews, and two expansions, Mask of the Betrayer and Storm of Zehir, were released in 2007 and 2008.
During Neverwinter Nights 2 development, Obsidian worked with other publishers on new projects. Disney Interactive Studios asked Obsidian to make a prequel to Snow White and the Seven Dwarves called Dwarfs, a third-person action game for PlayStation 3 and Xbox 360. Work began in 2005, and the team created a prototype. However, when Bob Iger became CEO of Disney, the company changed direction, making the Snow White franchise untouchable. The project was canceled, and Urquhart said the team was "heartbroken" about losing the game.
After Neverwinter Nights 2 was completed, Obsidian was contacted by three publishers. Electronic Arts wanted Obsidian to make a role-playing game to compete with The Elder Scrolls IV: Oblivion. Another publisher also wanted a fantasy RPG. Sega asked Obsidian to create an action role-playing game set in the Alien universe, titled Aliens: Crucible. The game would include base-building, dialogue choices, and character customization. In February 2009, Obsidian sent a prototype to Sega, but Sega canceled the project three weeks later without reviewing the demo. The cancellation was confirmed in June 2009. Around the same time, Atari asked Obsidian to revive Baldur's Gate III. Obsidian requested a large budget, which Atari could not afford. The deal failed when Atari Europe was sold to Namco Bandai Games.
Despite the cancellation of Aliens: Crucible, Sega wanted to work with Obsidian on another project. Instead of making a sequel, Sega asked Obsidian to create a role-playing game based on
Philosophy
When working for a publisher, it is important to respond to both players and the publisher. These two groups may not always agree. It is better to receive direct payment from players for work they want and to communicate with them throughout the process to ensure their needs are met.
Obsidian is known for creating follow-up games in popular series such as Star Wars: Knights of the Old Republic, Neverwinter Nights, Fallout, South Park, and Dungeon Siege. Urquhart said the company is comfortable making sequels because they allow the studio to "explore someone else's world" and expand on ideas from the original games. The studio also believes licensed projects are easier to develop. Obsidian viewed sequels as steps toward eventually creating original games based on its own ideas. Later, the studio focused more on making its own games, which gave it more creative freedom and reduced dependence on publishers. Obsidian used the crowdfunding platform Kickstarter to test the popularity of games or genres.
Before being acquired by Microsoft in 2018, Obsidian operated as an independent company. It aimed to quickly adapt to market changes and avoid staying stuck in one area. While the studio’s main goal remained creating character-driven role-playing games, it was open to trying smaller projects in different genres. One example of this strategy was the development of Armored Warfare.
A dungeon crawler game based on the story of the company’s five founders was created. The game was placed inside an arcade cabinet at Obsidian’s office.