Recently, an insider reported that Obsidian Entertainment tried to make a game in the spirit of the Fallout franchise. The message caught the attention of screenwriter and game designer Chris Avellone, who decided to share his opinion.
He no longer works at the studio, but he has his sources. Avellone stated that initially Obsidian tried to make a full-fledged new Fallout, but then Bethesda Game Studios (which manages the franchise) intervened and canceled the project. The developers had to rework it into something “in the spirit of Fallout”:
From what I heard, it was originally intended to be a Fallout game, but according to sources, Bethesda already vetoed it, so the project had to change direction/tone – from Fallout to something “similar” to Fallout.
Avellone also claims that Avowed 2 has not been completely canceled, nor has the DLC for The Outer Worlds 2. However, he made a reservation that plans might change again:
In other news: Obsidian employees seem to have been informed today that all company projects have been “re-evaluated.” Apparently, Grounded will still continue to be developed (it's mostly outsourced to Eidos Montreal anyway, so no surprise there), DLC for The Outer Worlds 2 is still planned (the first one in September), and despite reports of cancellation: Avowed 2 is STILL in development (for now) in hopes of “re-pitching” the project (whatever that means).