by 
A new report has come out today about the future of Xbox studio Obsidian, with Bloomberg's well-known reporter Jason Schreier claiming that the company will focus on a new Fallout game going forward, and not a sequel to Avowed.
Schreier says that progress on Avowed 2 had been "going well" and it would have been announced within the next year, but it doesn't fit into new Xbox boss Asha Sharma's plans. Nevertheless, a small number of people will continue working on it until Fallout is "ready", just in case it could be revived at some point in the future.
"In the end, it did not fit into Sharma’s overall strategy, according to people familiar with the game’s development."
Instead, the focus now is for studio design director Josh Sawyer to lead the new Fallout game, although it's said "the emerging strategy is still in flux" and that it "could still change".
Obsidian also plans to keep working on new content for The Outer Worlds 2 and Grounded 2. However, Sawyer was apparently working on a roleplaying game that's seemingly getting the boot along with Avowed 2.
"Under the new plan, studio design director Josh Sawyer will lead a new title in the Fallout universe..."
"Previously, Sawyer had been directing a roleplaying game that was similar structurally and thematically to Fallout but was not part of the franchise."
The belief is that Obsidian lost around 25% of its workforce as part of the Xbox layoffs this week, and this report does mention that "multiple" projects have been canned at the studio, although we didn't know of any of them publicly.
As always, we warn you that this is just reported information and nothing official, and even Schreier himself says that the plans could change. That said, he's a reporter with a strong track record, so it's most likely on the money.