There may be hope for Avowed 2 just yet, as it appears that a small team at Obsidian is going to continue working on the game, despite it being officially cancelled behind-the-scenes. While not an officially announced game, Avowed 2 was rumoured to be in the works by Bloomberg's Jason Schreier, who said that it had been canned so that Obsidian could work on a new Fallout game.
Now, Schreier's back with fresh information via his YouTube channel (thanks, ResetEra), where he says that a small team at Obsidian is going to keep working on Avowed 2, despite Xbox canning the project. While Fallout is being worked on, Schreier believes that Obsidian will try and pitch Avowed 2 to be released, giving the studio some output.
"It was actually further along than most people would guess for a sequel to a game that came out last year. So I think their hope is perhaps they'll get it so close to finish that Xbox will look at it and say 'Okay you can finish and release this, it won't cost that much more to finish it,'" Schreier said.
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If Avowed 2 is quite far along in its development, then it would be a shame to never see what the project could have become. The first game was a solid RPG that didn't quite manage to find its audience, but a sequel could remedy that with a more polished experience compared to the first game. That's all speculation, and it's possible that Xbox denies Obsidian the chance to release the game, no matter how close Avowed 2 may or may not be to releasing.