Following the closure of Black Isle Studios, Avellone joins Obsidian Entertainment, a studio founded by former Black Isle employees. This allows him to continue working on RPGs with a familiar team.

Avellone serves as the lead designer and writer on "Knights of the Old Republic II: The Sith Lords", a sequel to the popular "Star Wars" RPG. The game's darker themes, complex characters, and philosophical exploration of the Force receive significant praise.

Avellone contributes to "Neverwinter Nights 2", a "Dungeons & Dragons"-based RPG. He works on the game's storyline, characters, and world-building, helping to create a deep and immersive experience.

Avellone is a senior designer on "Fallout: New Vegas", a critically acclaimed RPG set in the "Fallout" universe. He is responsible for the game's factions, companions, and many of its most memorable quests, contributing significantly to its open-world gameplay and branching narrative. He wrote the character arc of companion characters such as Veronica Santangelo.

Avellone contributes to "Dungeon Siege III", an action RPG, by working on the story and the writing.

Avellone contributed to "Pillars of Eternity" through writing, including the character Aloth.

Avellone leaves Obsidian Entertainment to pursue independent projects and freelance opportunities. This marks a shift in his career, allowing him to work on a wider variety of games and mediums.