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Obsidian Entertainment

The studio Black Isle's leaders founded as Interplay failed

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Obsidian Entertainment was founded in Irvine, California, in 2003 by Feargus Urquhart and other senior staff leaving Interplay's Black Isle Studios. For years it made sequels to other studios' games, among them Knights of the Old Republic II, Neverwinter Nights 2 and Fallout: New Vegas, and gained a name for strong writing and buggy launches. Kickstarter paid for its own Pillars of Eternity, and Microsoft bought it in 2018.

In June 2004 Computer Gaming World flew to Irvine, California, for a first look at the sequel to BioWare’s Star Wars: Knights of the Old Republic, and expected its readers’ first question to be: “Who is Obsidian Entertainment?” The answer was a new company “founded by the main Uberbrains of Interplay’s legendary Black Isle Studios”, the people behind Fallout, Icewind Dale and Planescape: Torment. Black Isle was closing, and its leaders had set up on their own. For the next decade Obsidian made its living finishing other studios’ stories, well enough that Edge called it “the method actor of game developers”, and a reputation for rough launches followed it. Then its fans paid for a game of its own.

Fast facts

  • Founded: 2003, in Irvine, California.
  • Founders: Feargus Urquhart, formerly head of Black Isle Studios, with Chris Avellone, Chris Parker, Darren Monahan and Chris Jones.
  • Early work: sequels to other studios’ games, for LucasArts, Atari, Bethesda Softworks and Square Enix.
  • Own series: Pillars of Eternity (2015), crowdfunded on Kickstarter.
  • Owner: Microsoft, since 2018.

Out of Black Isle

Obsidian began as Interplay was running out of money. PC Gamer reported in January 2004 that “several key figures (including Feargus Urquhart)” had left Black Isle earlier in 2003 to found Obsidian, which was working on an unannounced role-playing game that might be a sequel to Knights of the Old Republic. In December 2003 Interplay laid off the whole of Black Isle (see Black Isle Studios and Interplay).

The founders’ history is the reason the work came to them. When BioWare moved on to Jade Empire, LucasArts needed someone else for the Knights of the Old Republic sequel. Its producer, Mike Gallo, told Edge that Obsidian “is made up of several industry vets who have created a bunch of great RPGs, and BioWare highly recommended them to us”. Edge noted that the two companies had worked together before, when Black Isle made Icewind Dale and Planescape: Torment on BioWare’s Infinity Engine.

Sequels to other people’s games

Star Wars: Knights of the Old Republic II: The Sith Lords came out on the Xbox in December 2004 and on the PC in February 2005, published by LucasArts. Chris Avellone, its lead designer, chose not to continue the first game’s hero: “I didn’t want to stomp all over anyone’s decisions from the first game,” he told Computer Gaming World. Instead the player told other characters how the first game had ended, and the story followed their version. Edge, looking back in 2010, thought its writing explored “themes of greater psychological and moral complexity” than the first game, but that its “most disappointing aspect” was “a simple one. It isn’t finished.” It described an “alleged 13-month” development aimed at Christmas 2004, a buggy release and a stripped-down final act, and so much cut material left on the disc that fans formed modding projects to restore it (see Knights of the Old Republic).

Neverwinter Nights 2 (2006), published by Atari, was, as Edge put it, Obsidian’s second sequel to a series it did not start. Urquhart told Hyper that BioWare “really didn’t have enough time” to make the first game’s campaign as compelling as it could have been, and that the sequel was meant for “people who have always loved the Bioware and Black Isles RPGs”.

In 2010 Obsidian released two games. Alpha Protocol, a spy role-playing game published by Sega, was set in a world of Obsidian’s own making; Edge later called it “intriguing, flawed”. Fallout: New Vegas, published by Bethesda Softworks, took Obsidian back to the series many of its staff had worked on at Interplay. Edge pointed out that Avellone and J. E. Sawyer had been working on Black Isle’s cancelled Fallout 3, code-named Van Buren. Its review liked the Mojave’s factions and dark humour, but listed the “game’s litany of problems”: a clumsy camera, invisible walls, long loading, freezes and crashes. Dungeon Siege III (2011) followed for Square Enix, the fourth development team to work on Gas Powered Games’ series.

The Metacritic bonus

Fallout: New Vegas sold well: Game Developer reported that it shipped 5 million copies in its first month. But in March 2012, as Obsidian laid off staff, Avellone wrote on Twitter that it had been “a straight payment, no royalties, only a bonus if we got an 85+ on Metacritic, which we didn’t”. The PC and Xbox 360 versions averaged 84 on Metacritic, one point short. The account is Avellone’s own. Asked about it later by Kotaku, Urquhart said he could not comment on contracts directly, “but what I can say is that in general, publishers like to have Metacritic scores as an aspect of contracts”.

Kickstarter and Pillars of Eternity

In September 2012 Obsidian asked players directly for $1.1 million to make Project Eternity, a party-based role-playing game in the style of Black Isle’s Infinity Engine games, set in a world of its own. Edge saw it as the studio’s chance “to build a world from scratch, without publisher input”. The campaign closed in October 2012 with $3,986,929 from 73,986 backers on Kickstarter, the most any video game had raised there at that time, and more through PayPal. Pillars of Eternity came out in March 2015, published by Paradox Interactive. Its sequel, Pillars of Eternity II: Deadfire, raised about $4.4 million on the crowdfunding site Fig in 2017 and came out in 2018.

Avellone, a co-founder, left Obsidian in June 2015.

Microsoft

At its X018 event in Mexico City in November 2018, Microsoft announced it was buying Obsidian and inXile Entertainment, Brian Fargo’s studio. Wireframe noted that few reports on Obsidian had “failed to mention the studio’s financial woes”, and doubted that Microsoft would let it “push out products late and in a buggy fashion, for which the studio is infamous”. Both studios were to keep their “independent, creative culture”. A game already in progress was not affected: The Outer Worlds (2019), a science-fiction role-playing game led by the Fallout creators Tim Cain and Leonard Boyarsky and published by Take-Two’s Private Division label. Wireframe gave it 84%.

Under Microsoft, Obsidian made the survival game Grounded, the historical murder mystery Pentiment (2022), and Avowed (February 2025), a first-person role-playing game set in the world of Pillars of Eternity. The Outer Worlds 2 followed in October 2025 on Xbox, PC and PlayStation 5.

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