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After adding five studios this year, Microsoft’s shopping cart isn’t full yet, as the publisher announced the acquisition of Obsidian Entertainment, one of the top role-playing game development houses in the industry.

Microsoft made the announcement from its X018 fan event today in Mexico City, where it also said it has acquired InXile Entertainment, another excellent RPG studio (oddly enough, but Obsidian and InXile trace their origins to the death of Black Isle, a leading RPG house in the late 1990s and early 2000s). Microsoft now has 13 game-development teams under its banner after acquiring four studios earlier this year —  Ninja Theory, Playground Games, Compulsion Games, and Undead Labs — and starting The Initiative in Santa Monica.

These moves are all about ensuring that Microsoft has enough exclusive games to entice people into its ecosystem. And it’s not just about consoles, as the publisher needs to feed games into its Xbox Game Pass subscription program, especially on PC (and Obsidian, like InXile, is a PC-first studio). Kotaku reported that this acquisition was in the works last month, though Microsoft nor Obsidian confirmed it at the time.

“Obsidian has a long history of creating deep RPG gameplay experiences and vast, engaging worlds,” Microsoft said. “We couldn’t be more excited about the opportunity to add their expertise to Microsoft Studios while enabling the studio to build on their talent and vision to fully realize their creative ambitions.


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“Obsidian’s ability to work with such a wide range of developers shows that they are creative, flexible and dependable. We are most impressed with their strong execution on projects like Star Wars: Knights of the Old Republic II: The Sith Lords, Fallout: New Vegas, South Park: The Stick of Truth, and Pillars of Eternity.”

2018 has been a good year for Obsidian. Pillars of Eternity II: Deadfire debuted in May to strong reviews, and I not only thought it was better than its predecessor, but it’s also my favorite game of the year so far.

Microsoft declined over email to disclose how much it paid for Obsidian. It also said that “There are no changes planned for the Obsidian team. We are committed to empowering the studio to maintain its independent, creative culture.” I got the same “There are no changes planned for the Obsidian team” when I asked if the studio’s leadership is coming along or stepping aside.”

A new pillar

Obsidian opened doors in 2003 shortly after Black Isle closed. Its first game was Star Wars: Knights of the Old Republic II — The Sith Lords, which critics lauded for its story. It did have some issues, feeling incomplete due to cut content (which community modders later added in). But its reputation has only increased in later years, as has the rep for its second release, 2006’s Neverwinter Nights 2.

2010 would bring the game that helped define Obsidian — Fallout: New Vegas. It’s considered the best of the post-Fallout 3 games, and some view it as the studio’s best release. But Obsidian missed its Metacritic score bonus by a measly point, and this caused a financial crisis at the company.

Above: Pillars of Eternity was Obsidian’s first foray into crowdfunding.

Image Credit: Paradox

The next project would save it.

Obsidian became one of the first prominent game studios to use Kickstarter when it announced Project Eternity (the eventual Pillars of Eternity) in 2012. This would get nearly 74,000 backers and almost $4 million in pledges, and it remains the fourth-largest game project on the crowdfunding site.

The studio would make a few games under publishing agreements — Pathfinder Adventures, Tyranny, and South Park: The Stick of Truth — before going back to crowdfunding in 2017 for Pillars of Eternity II, raising more than $4.2 million on Fig (an equity platform where funders can get a return on their pledges).

Figgy situation?

The question about leadership could be important. Obsidian founder and CEO Feargus Urquhart is on the advisory board for the crowdfunding platform Fig, and he helped launch it 2015 along with founder Justin Bailey, a former chief operating officer at Double Fine; InXile CEO Brian Fargo; and Double Fine CEO Tim Schafer. Obsidian raised money for its latest game, Pillars of Eternity II: Deadire, on Fig, too.

I asked Microsoft and Obsidian if this put an end to crowdfunding for the RPG developer’s projects and will update when I receive an answer.

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