diff --git a/.gitmodules b/.gitmodules
index e6e29cddda..1d2e76750d 100644
--- a/.gitmodules
+++ b/.gitmodules
@@ -84,6 +84,9 @@
 [submodule "Externals/Vulkan-Headers"]
 	path = Externals/Vulkan-Headers
 	url = https://github.com/KhronosGroup/Vulkan-Headers.git
+[submodule "Externals/watcher/watcher"]
+	path = Externals/watcher/watcher
+	url = https://github.com/e-dant/watcher.git
 [submodule "Externals/SFML/SFML"]
 	path = Externals/SFML/SFML
 	url = https://github.com/SFML/SFML.git
diff --git a/CMakeLists.txt b/CMakeLists.txt
index f1ebba3240..e174d0e413 100644
--- a/CMakeLists.txt
+++ b/CMakeLists.txt
@@ -784,6 +784,8 @@ if (USE_RETRO_ACHIEVEMENTS)
 	add_subdirectory(Externals/rcheevos)
 endif()
 
+add_subdirectory(Externals/watcher)
+
 ########################################
 # Pre-build events: Define configuration variables and write SCM info header
 #
diff --git a/Externals/watcher/CMakeLists.txt b/Externals/watcher/CMakeLists.txt
new file mode 100644
index 0000000000..097f16d647
--- /dev/null
+++ b/Externals/watcher/CMakeLists.txt
@@ -0,0 +1,4 @@
+add_library(watcher INTERFACE IMPORTED GLOBAL)
+set_target_properties(watcher PROPERTIES
+	INTERFACE_INCLUDE_DIRECTORIES ${CMAKE_CURRENT_LIST_DIR}/watcher/include
+)
diff --git a/Externals/watcher/watcher b/Externals/watcher/watcher
new file mode 160000
index 0000000000..0d6b9b409c
--- /dev/null
+++ b/Externals/watcher/watcher
@@ -0,0 +1 @@
+Subproject commit 0d6b9b409ccaed6313437ea3dc8b2fc078f3d25b
diff --git a/Source/Core/Common/CMakeLists.txt b/Source/Core/Common/CMakeLists.txt
index 608e2f270a..2664c37d2a 100644
--- a/Source/Core/Common/CMakeLists.txt
+++ b/Source/Core/Common/CMakeLists.txt
@@ -64,6 +64,8 @@ add_library(common
   FatFsUtil.h
   FileSearch.cpp
   FileSearch.h
+  FilesystemWatcher.cpp
+  FilesystemWatcher.h
   FileUtil.cpp
   FileUtil.h
   FixedSizeQueue.h
@@ -183,6 +185,7 @@ PRIVATE
   FatFs
   Iconv::Iconv
   spng::spng
+  watcher
   ${VTUNE_LIBRARIES}
 )
 
diff --git a/Source/Core/Common/FilesystemWatcher.cpp b/Source/Core/Common/FilesystemWatcher.cpp
new file mode 100644
index 0000000000..335a1ba7f5
--- /dev/null
+++ b/Source/Core/Common/FilesystemWatcher.cpp
@@ -0,0 +1,62 @@
+// Copyright 2025 Dolphin Emulator Project
+// SPDX-License-Identifier: GPL-2.0-or-later
+
+#include "Common/FilesystemWatcher.h"
+
+#include <wtr/watcher.hpp>
+
+#include "Common/Logging/Log.h"
+#include "Common/StringUtil.h"
+
+namespace Common
+{
+FilesystemWatcher::FilesystemWatcher() = default;
+FilesystemWatcher::~FilesystemWatcher() = default;
+
+void FilesystemWatcher::Watch(const std::string& path)
+{
+  const auto [iter, inserted] = m_watched_paths.try_emplace(path, nullptr);
+  if (inserted)
+  {
+    iter->second = std::make_unique<wtr::watch>(path, [this](wtr::event e) {
+      if (e.path_type == wtr::event::path_type::watcher)
+      {
+        return;
+      }
+
+      if (e.effect_type == wtr::event::effect_type::create)
+      {
+        const auto path = WithUnifiedPathSeparators(PathToString(e.path_name));
+        PathAdded(path);
+      }
+      else if (e.effect_type == wtr::event::effect_type::modify)
+      {
+        const auto path = WithUnifiedPathSeparators(PathToString(e.path_name));
+        PathModified(path);
+      }
+      else if (e.effect_type == wtr::event::effect_type::rename)
+      {
+        if (!e.associated)
+        {
+          WARN_LOG_FMT(COMMON, "Rename on path seen without association!");
+          return;
+        }
+
+        const auto old_path = WithUnifiedPathSeparators(PathToString(e.path_name));
+        const auto new_path = WithUnifiedPathSeparators(PathToString(e.associated->path_name));
+        PathRenamed(old_path, new_path);
+      }
+      else if (e.effect_type == wtr::event::effect_type::destroy)
+      {
+        const auto path = WithUnifiedPathSeparators(PathToString(e.path_name));
+        PathDeleted(path);
+      }
+    });
+  }
+}
+
+void FilesystemWatcher::Unwatch(const std::string& path)
+{
+  m_watched_paths.erase(path);
+}
+}  // namespace Common
diff --git a/Source/Core/Common/FilesystemWatcher.h b/Source/Core/Common/FilesystemWatcher.h
new file mode 100644
index 0000000000..ad1c822e2b
--- /dev/null
+++ b/Source/Core/Common/FilesystemWatcher.h
@@ -0,0 +1,47 @@
+// Copyright 2025 Dolphin Emulator Project
+// SPDX-License-Identifier: GPL-2.0-or-later
+
+#pragma once
+
+#include <map>
+#include <memory>
+#include <string>
+#include <string_view>
+
+namespace wtr
+{
+inline namespace watcher
+{
+class watch;
+}
+}  // namespace wtr
+
+namespace Common
+{
+// A class that can watch a path and receive callbacks
+// when files or directories underneath that path receive events
+class FilesystemWatcher
+{
+public:
+  FilesystemWatcher();
+  virtual ~FilesystemWatcher();
+
+  void Watch(const std::string& path);
+  void Unwatch(const std::string& path);
+
+private:
+  // A new file or folder was added to one of the watched paths
+  virtual void PathAdded(std::string_view path) {}
+
+  // A file or folder was modified in one of the watched paths
+  virtual void PathModified(std::string_view path) {}
+
+  // A file or folder was renamed in one of the watched paths
+  virtual void PathRenamed(std::string_view old_path, std::string_view new_path) {}
+
+  // A file or folder was deleted in one of the watched paths
+  virtual void PathDeleted(std::string_view path) {}
+
+  std::map<std::string, std::unique_ptr<wtr::watch>> m_watched_paths;
+};
+}  // namespace Common
diff --git a/Source/Core/Core/System.cpp b/Source/Core/Core/System.cpp
index d52975fe1b..55c0b92e48 100644
--- a/Source/Core/Core/System.cpp
+++ b/Source/Core/Core/System.cpp
@@ -34,6 +34,7 @@
 #include "IOS/USB/Emulated/Skylanders/Skylander.h"
 #include "IOS/USB/USBScanner.h"
 #include "VideoCommon/Assets/CustomAssetLoader.h"
+#include "VideoCommon/Assets/CustomResourceManager.h"
 #include "VideoCommon/CommandProcessor.h"
 #include "VideoCommon/Fifo.h"
 #include "VideoCommon/GeometryShaderManager.h"
@@ -97,6 +98,7 @@ struct System::Impl
   Interpreter m_interpreter;
   JitInterface m_jit_interface;
   VideoCommon::CustomAssetLoader m_custom_asset_loader;
+  VideoCommon::CustomResourceManager m_custom_resource_manager;
   FifoPlayer m_fifo_player;
   FifoRecorder m_fifo_recorder;
   Movie::MovieManager m_movie;
@@ -339,4 +341,9 @@ VideoCommon::CustomAssetLoader& System::GetCustomAssetLoader() const
 {
   return m_impl->m_custom_asset_loader;
 }
+
+VideoCommon::CustomResourceManager& System::GetCustomResourceManager() const
+{
+  return m_impl->m_custom_resource_manager;
+}
 }  // namespace Core
diff --git a/Source/Core/Core/System.h b/Source/Core/Core/System.h
index 67069c5e22..d5dc9290d5 100644
--- a/Source/Core/Core/System.h
+++ b/Source/Core/Core/System.h
@@ -109,7 +109,8 @@ class SystemTimersManager;
 namespace VideoCommon
 {
 class CustomAssetLoader;
-}
+class CustomResourceManager;
+}  // namespace VideoCommon
 namespace VideoInterface
 {
 class VideoInterfaceManager;
@@ -198,6 +199,7 @@ public:
   XFStateManager& GetXFStateManager() const;
   VideoInterface::VideoInterfaceManager& GetVideoInterface() const;
   VideoCommon::CustomAssetLoader& GetCustomAssetLoader() const;
+  VideoCommon::CustomResourceManager& GetCustomResourceManager() const;
 
 private:
   System();
diff --git a/Source/Core/DolphinLib.props b/Source/Core/DolphinLib.props
index 67e3a15f4c..ece9e6878c 100644
--- a/Source/Core/DolphinLib.props
+++ b/Source/Core/DolphinLib.props
@@ -56,6 +56,7 @@
     <ClInclude Include="Common\Event.h" />
     <ClInclude Include="Common\FatFsUtil.h" />
     <ClInclude Include="Common\FileSearch.h" />
+    <ClInclude Include="Common\FilesystemWatcher.h" />
     <ClInclude Include="Common\FileUtil.h" />
     <ClInclude Include="Common\FixedSizeQueue.h" />
     <ClInclude Include="Common\Flag.h" />
@@ -663,12 +664,16 @@
     <ClInclude Include="VideoCommon\Assets\CustomAsset.h" />
     <ClInclude Include="VideoCommon\Assets\CustomAssetLibrary.h" />
     <ClInclude Include="VideoCommon\Assets\CustomAssetLoader.h" />
+    <ClInclude Include="VideoCommon\Assets\CustomAssetLoader2.h" />
+    <ClInclude Include="VideoCommon\Assets\CustomResourceManager.h" />
     <ClInclude Include="VideoCommon\Assets\CustomTextureData.h" />
     <ClInclude Include="VideoCommon\Assets\DirectFilesystemAssetLibrary.h" />
     <ClInclude Include="VideoCommon\Assets\MaterialAsset.h" />
     <ClInclude Include="VideoCommon\Assets\MeshAsset.h" />
     <ClInclude Include="VideoCommon\Assets\ShaderAsset.h" />
     <ClInclude Include="VideoCommon\Assets\TextureAsset.h" />
+    <ClInclude Include="VideoCommon\Assets\Types.h" />
+    <ClInclude Include="VideoCommon\Assets\WatchableFilesystemAssetLibrary.h" />
     <ClInclude Include="VideoCommon\AsyncRequests.h" />
     <ClInclude Include="VideoCommon\AsyncShaderCompiler.h" />
     <ClInclude Include="VideoCommon\BoundingBox.h" />
@@ -805,6 +810,7 @@
     <ClCompile Include="Common\ENet.cpp" />
     <ClCompile Include="Common\FatFsUtil.cpp" />
     <ClCompile Include="Common\FileSearch.cpp" />
+    <ClCompile Include="Common\FilesystemWatcher.cpp" />
     <ClCompile Include="Common\FileUtil.cpp" />
     <ClCompile Include="Common\FloatUtils.cpp" />
     <ClCompile Include="Common\GekkoDisassembler.cpp" />
@@ -1311,6 +1317,8 @@
     <ClCompile Include="VideoCommon\Assets\CustomAsset.cpp" />
     <ClCompile Include="VideoCommon\Assets\CustomAssetLibrary.cpp" />
     <ClCompile Include="VideoCommon\Assets\CustomAssetLoader.cpp" />
+    <ClCompile Include="VideoCommon\Assets\CustomAssetLoader2.cpp" />
+    <ClCompile Include="VideoCommon\Assets\CustomResourceManager.cpp" />
     <ClCompile Include="VideoCommon\Assets\CustomTextureData.cpp" />
     <ClCompile Include="VideoCommon\Assets\DirectFilesystemAssetLibrary.cpp" />
     <ClCompile Include="VideoCommon\Assets\MaterialAsset.cpp" />
diff --git a/Source/Core/VideoCommon/Assets/CustomAsset.cpp b/Source/Core/VideoCommon/Assets/CustomAsset.cpp
index 1591f93f91..96205b084c 100644
--- a/Source/Core/VideoCommon/Assets/CustomAsset.cpp
+++ b/Source/Core/VideoCommon/Assets/CustomAsset.cpp
@@ -6,8 +6,8 @@
 namespace VideoCommon
 {
 CustomAsset::CustomAsset(std::shared_ptr<CustomAssetLibrary> library,
-                         const CustomAssetLibrary::AssetID& asset_id)
-    : m_owning_library(std::move(library)), m_asset_id(asset_id)
+                         const CustomAssetLibrary::AssetID& asset_id, u64 session_id)
+    : m_owning_library(std::move(library)), m_asset_id(asset_id), m_session_id(session_id)
 {
 }
 
@@ -34,6 +34,11 @@ const CustomAssetLibrary::TimeType& CustomAsset::GetLastLoadedTime() const
   return m_last_loaded_time;
 }
 
+std::size_t CustomAsset::GetSessionId() const
+{
+  return m_session_id;
+}
+
 const CustomAssetLibrary::AssetID& CustomAsset::GetAssetId() const
 {
   return m_asset_id;
diff --git a/Source/Core/VideoCommon/Assets/CustomAsset.h b/Source/Core/VideoCommon/Assets/CustomAsset.h
index ea4a182932..85f0471ff7 100644
--- a/Source/Core/VideoCommon/Assets/CustomAsset.h
+++ b/Source/Core/VideoCommon/Assets/CustomAsset.h
@@ -18,7 +18,7 @@ class CustomAsset
 {
 public:
   CustomAsset(std::shared_ptr<CustomAssetLibrary> library,
-              const CustomAssetLibrary::AssetID& asset_id);
+              const CustomAssetLibrary::AssetID& asset_id, u64 session_id);
   virtual ~CustomAsset() = default;
   CustomAsset(const CustomAsset&) = delete;
   CustomAsset(CustomAsset&&) = delete;
@@ -39,6 +39,9 @@ public:
   // Returns an id that uniquely identifies this asset
   const CustomAssetLibrary::AssetID& GetAssetId() const;
 
+  // Returns an id that is unique to this session
+  std::size_t GetSessionId() const;
+
   // A rough estimate of how much space this asset
   // will take in memroy
   std::size_t GetByteSizeInMemory() const;
@@ -49,6 +52,7 @@ protected:
 private:
   virtual CustomAssetLibrary::LoadInfo LoadImpl(const CustomAssetLibrary::AssetID& asset_id) = 0;
   CustomAssetLibrary::AssetID m_asset_id;
+  std::size_t m_session_id;
 
   mutable std::mutex m_info_lock;
   std::size_t m_bytes_loaded = 0;
diff --git a/Source/Core/VideoCommon/Assets/CustomAssetLoader.h b/Source/Core/VideoCommon/Assets/CustomAssetLoader.h
index 90d4f81a0e..d38a2e1db3 100644
--- a/Source/Core/VideoCommon/Assets/CustomAssetLoader.h
+++ b/Source/Core/VideoCommon/Assets/CustomAssetLoader.h
@@ -67,19 +67,20 @@ private:
       if (shared)
         return shared;
     }
-    std::shared_ptr<AssetType> ptr(new AssetType(std::move(library), asset_id), [&](AssetType* a) {
-      {
-        std::lock_guard lk(m_asset_load_lock);
-        m_total_bytes_loaded -= a->GetByteSizeInMemory();
-        m_assets_to_monitor.erase(a->GetAssetId());
-        if (m_max_memory_available >= m_total_bytes_loaded && m_memory_exceeded)
-        {
-          INFO_LOG_FMT(VIDEO, "Asset memory went below limit, new assets can begin loading.");
-          m_memory_exceeded = false;
-        }
-      }
-      delete a;
-    });
+    std::shared_ptr<AssetType> ptr(
+        new AssetType(std::move(library), asset_id, asset_map.size()), [&](AssetType* a) {
+          {
+            std::lock_guard lk(m_asset_load_lock);
+            m_total_bytes_loaded -= a->GetByteSizeInMemory();
+            m_assets_to_monitor.erase(a->GetAssetId());
+            if (m_max_memory_available >= m_total_bytes_loaded && m_memory_exceeded)
+            {
+              INFO_LOG_FMT(VIDEO, "Asset memory went below limit, new assets can begin loading.");
+              m_memory_exceeded = false;
+            }
+          }
+          delete a;
+        });
     it->second = ptr;
     m_asset_load_thread.Push(it->second);
     return ptr;
diff --git a/Source/Core/VideoCommon/Assets/CustomAssetLoader2.cpp b/Source/Core/VideoCommon/Assets/CustomAssetLoader2.cpp
new file mode 100644
index 0000000000..17fc2992e4
--- /dev/null
+++ b/Source/Core/VideoCommon/Assets/CustomAssetLoader2.cpp
@@ -0,0 +1,175 @@
+// Copyright 2025 Dolphin Emulator Project
+// SPDX-License-Identifier: GPL-2.0-or-later
+
+#include "VideoCommon/Assets/CustomAssetLoader2.h"
+
+#include "Common/Logging/Log.h"
+#include "Common/Thread.h"
+
+namespace VideoCommon
+{
+void CustomAssetLoader2::Initialize()
+{
+  ResizeWorkerThreads(2);
+}
+
+void CustomAssetLoader2 ::Shutdown()
+{
+  Reset(false);
+}
+
+void CustomAssetLoader2::Reset(bool restart_worker_threads)
+{
+  const std::size_t worker_thread_count = m_worker_threads.size();
+  StopWorkerThreads();
+
+  {
+    std::lock_guard<std::mutex> guard(m_pending_work_lock);
+    m_pending_assets.clear();
+    m_max_memory_allowed = 0;
+    m_current_asset_memory = 0;
+  }
+
+  {
+    std::lock_guard<std::mutex> guard(m_completed_work_lock);
+    m_completed_asset_session_ids.clear();
+    m_completed_asset_memory = 0;
+  }
+
+  if (restart_worker_threads)
+  {
+    StartWorkerThreads(static_cast<u32>(worker_thread_count));
+  }
+}
+
+bool CustomAssetLoader2::StartWorkerThreads(u32 num_worker_threads)
+{
+  if (num_worker_threads == 0)
+    return true;
+
+  for (u32 i = 0; i < num_worker_threads; i++)
+  {
+    m_worker_thread_start_result.store(false);
+
+    void* thread_param = nullptr;
+    std::thread thr(&CustomAssetLoader2::WorkerThreadEntryPoint, this, thread_param);
+    m_init_event.Wait();
+
+    if (!m_worker_thread_start_result.load())
+    {
+      WARN_LOG_FMT(VIDEO, "Failed to start asset load worker thread.");
+      thr.join();
+      break;
+    }
+
+    m_worker_threads.push_back(std::move(thr));
+  }
+
+  return HasWorkerThreads();
+}
+
+bool CustomAssetLoader2::ResizeWorkerThreads(u32 num_worker_threads)
+{
+  if (m_worker_threads.size() == num_worker_threads)
+    return true;
+
+  StopWorkerThreads();
+  return StartWorkerThreads(num_worker_threads);
+}
+
+bool CustomAssetLoader2::HasWorkerThreads() const
+{
+  return !m_worker_threads.empty();
+}
+
+void CustomAssetLoader2::StopWorkerThreads()
+{
+  if (!HasWorkerThreads())
+    return;
+
+  // Signal worker threads to stop, and wake all of them.
+  {
+    std::lock_guard<std::mutex> guard(m_pending_work_lock);
+    m_exit_flag.Set();
+    m_worker_thread_wake.notify_all();
+  }
+
+  // Wait for worker threads to exit.
+  for (std::thread& thr : m_worker_threads)
+    thr.join();
+  m_worker_threads.clear();
+  m_exit_flag.Clear();
+}
+
+void CustomAssetLoader2::WorkerThreadEntryPoint(void* param)
+{
+  Common::SetCurrentThreadName("Asset Loader Worker");
+
+  m_worker_thread_start_result.store(true);
+  m_init_event.Set();
+
+  WorkerThreadRun();
+}
+
+void CustomAssetLoader2::WorkerThreadRun()
+{
+  std::unique_lock<std::mutex> pending_lock(m_pending_work_lock);
+  while (!m_exit_flag.IsSet())
+  {
+    m_worker_thread_wake.wait(pending_lock);
+
+    while (!m_pending_assets.empty() && !m_exit_flag.IsSet())
+    {
+      auto pending_iter = m_pending_assets.begin();
+      const auto item = *pending_iter;
+      m_pending_assets.erase(pending_iter);
+
+      if ((m_current_asset_memory + m_completed_asset_memory) > m_max_memory_allowed)
+        break;
+
+      pending_lock.unlock();
+      if (item->Load())
+      {
+        std::lock_guard<std::mutex> completed_guard(m_completed_work_lock);
+        m_completed_asset_memory += item->GetByteSizeInMemory();
+        m_completed_asset_session_ids.push_back(item->GetSessionId());
+      }
+
+      pending_lock.lock();
+    }
+  }
+}
+
+std::vector<std::size_t>
+CustomAssetLoader2::LoadAssets(const std::list<CustomAsset*>& pending_assets,
+                               u64 current_loaded_memory, u64 max_memory_allowed)
+{
+  u64 total_memory = current_loaded_memory;
+  std::vector<std::size_t> completed_asset_session_ids;
+  {
+    std::lock_guard<std::mutex> guard(m_completed_work_lock);
+    m_completed_asset_session_ids.swap(completed_asset_session_ids);
+    total_memory += m_completed_asset_memory;
+    m_completed_asset_memory = 0;
+  }
+
+  if (pending_assets.empty())
+    return completed_asset_session_ids;
+
+  if (total_memory > max_memory_allowed)
+    return completed_asset_session_ids;
+
+  // There's new assets to process, notify worker threads
+  {
+    std::lock_guard<std::mutex> guard(m_pending_work_lock);
+    m_pending_assets = pending_assets;
+    m_current_asset_memory = total_memory;
+    m_max_memory_allowed = max_memory_allowed;
+    if (m_current_asset_memory < m_max_memory_allowed)
+      m_worker_thread_wake.notify_all();
+  }
+
+  return completed_asset_session_ids;
+}
+
+}  // namespace VideoCommon
diff --git a/Source/Core/VideoCommon/Assets/CustomAssetLoader2.h b/Source/Core/VideoCommon/Assets/CustomAssetLoader2.h
new file mode 100644
index 0000000000..18b05fef2c
--- /dev/null
+++ b/Source/Core/VideoCommon/Assets/CustomAssetLoader2.h
@@ -0,0 +1,65 @@
+// Copyright 2025 Dolphin Emulator Project
+// SPDX-License-Identifier: GPL-2.0-or-later
+
+#pragma once
+
+#include <atomic>
+#include <condition_variable>
+#include <list>
+#include <memory>
+#include <mutex>
+#include <thread>
+#include <vector>
+
+#include "Common/Event.h"
+#include "Common/Flag.h"
+#include "VideoCommon/Assets/CustomAsset.h"
+
+namespace VideoCommon
+{
+class CustomAssetLoader2
+{
+public:
+  CustomAssetLoader2() = default;
+  ~CustomAssetLoader2() = default;
+  CustomAssetLoader2(const CustomAssetLoader2&) = delete;
+  CustomAssetLoader2(CustomAssetLoader2&&) = delete;
+  CustomAssetLoader2& operator=(const CustomAssetLoader2&) = delete;
+  CustomAssetLoader2& operator=(CustomAssetLoader2&&) = delete;
+
+  void Initialize();
+  void Shutdown();
+
+  // Returns a vector of asset session ids that were loaded in the last frame
+  std::vector<std::size_t> LoadAssets(const std::list<CustomAsset*>& pending_assets,
+                                      u64 current_loaded_memory, u64 max_memory_allowed);
+
+  void Reset(bool restart_worker_threads = true);
+
+private:
+  bool StartWorkerThreads(u32 num_worker_threads);
+  bool ResizeWorkerThreads(u32 num_worker_threads);
+  bool HasWorkerThreads() const;
+  void StopWorkerThreads();
+
+  void WorkerThreadEntryPoint(void* param);
+  void WorkerThreadRun();
+
+  Common::Flag m_exit_flag;
+  Common::Event m_init_event;
+
+  std::vector<std::thread> m_worker_threads;
+  std::atomic_bool m_worker_thread_start_result{false};
+
+  std::list<CustomAsset*> m_pending_assets;
+  std::atomic<u64> m_current_asset_memory = 0;
+  u64 m_max_memory_allowed = 0;
+  std::mutex m_pending_work_lock;
+
+  std::condition_variable m_worker_thread_wake;
+
+  std::vector<std::size_t> m_completed_asset_session_ids;
+  std::atomic<u64> m_completed_asset_memory = 0;
+  std::mutex m_completed_work_lock;
+};
+}  // namespace VideoCommon
diff --git a/Source/Core/VideoCommon/Assets/CustomResourceManager.cpp b/Source/Core/VideoCommon/Assets/CustomResourceManager.cpp
new file mode 100644
index 0000000000..10a9742f87
--- /dev/null
+++ b/Source/Core/VideoCommon/Assets/CustomResourceManager.cpp
@@ -0,0 +1,202 @@
+// Copyright 2025 Dolphin Emulator Project
+// SPDX-License-Identifier: GPL-2.0-or-later
+
+#include "VideoCommon/Assets/CustomResourceManager.h"
+
+#include <fmt/format.h>
+
+#include "Common/MathUtil.h"
+#include "Common/MemoryUtil.h"
+#include "Common/VariantUtil.h"
+
+#include "VideoCommon/AbstractGfx.h"
+#include "VideoCommon/Assets/CustomAsset.h"
+#include "VideoCommon/Assets/TextureAsset.h"
+#include "VideoCommon/BPMemory.h"
+#include "VideoCommon/VideoConfig.h"
+#include "VideoCommon/VideoEvents.h"
+
+namespace VideoCommon
+{
+void CustomResourceManager::Initialize()
+{
+  m_asset_loader.Initialize();
+
+  const size_t sys_mem = Common::MemPhysical();
+  const size_t recommended_min_mem = 2 * size_t(1024 * 1024 * 1024);
+  // keep 2GB memory for system stability if system RAM is 4GB+ - use half of memory in other cases
+  m_max_ram_available =
+      (sys_mem / 2 < recommended_min_mem) ? (sys_mem / 2) : (sys_mem - recommended_min_mem);
+
+  m_xfb_event = AfterFrameEvent::Register([this](Core::System&) { XFBTriggered(""); },
+                                          "CustomResourceManager");
+}
+
+void CustomResourceManager::Shutdown()
+{
+  Reset();
+
+  m_asset_loader.Shutdown();
+}
+
+void CustomResourceManager::Reset()
+{
+  m_asset_loader.Reset(true);
+
+  m_loaded_assets = {};
+  m_pending_assets = {};
+  m_session_id_to_asset_data.clear();
+  m_asset_id_to_session_id.clear();
+  m_ram_used = 0;
+}
+
+void CustomResourceManager::ReloadAsset(const CustomAssetLibrary::AssetID& asset_id)
+{
+  std::lock_guard<std::mutex> guard(m_reload_mutex);
+  m_assets_to_reload.insert(asset_id);
+}
+
+CustomTextureData* CustomResourceManager::GetTextureDataFromAsset(
+    const CustomAssetLibrary::AssetID& asset_id,
+    std::shared_ptr<VideoCommon::CustomAssetLibrary> library)
+{
+  const auto [it, inserted] =
+      m_texture_data_asset_cache.try_emplace(asset_id, InternalTextureDataResource{});
+  if (it->second.asset_data &&
+      it->second.asset_data->load_type == AssetData::LoadType::LoadFinalyzed)
+  {
+    m_loaded_assets.put(it->second.asset->GetSessionId(), it->second.asset);
+    return &it->second.texture_data->m_texture;
+  }
+
+  LoadTextureDataAsset(asset_id, std::move(library), &it->second);
+
+  return nullptr;
+}
+
+void CustomResourceManager::LoadTextureDataAsset(
+    const CustomAssetLibrary::AssetID& asset_id,
+    std::shared_ptr<VideoCommon::CustomAssetLibrary> library,
+    InternalTextureDataResource* internal_texture_data)
+{
+  if (!internal_texture_data->asset)
+  {
+    internal_texture_data->asset =
+        CreateAsset<GameTextureAsset>(asset_id, AssetData::AssetType::TextureData, library);
+    internal_texture_data->asset_data =
+        &m_session_id_to_asset_data[internal_texture_data->asset->GetSessionId()];
+  }
+
+  auto texture_data = internal_texture_data->asset->GetData();
+  if (!texture_data ||
+      internal_texture_data->asset_data->load_type == AssetData::LoadType::PendingReload)
+  {
+    // Tell the system we are still interested in loading this asset
+    const auto session_id = internal_texture_data->asset->GetSessionId();
+    m_pending_assets.put(session_id, m_session_id_to_asset_data[session_id].asset.get());
+  }
+  else if (internal_texture_data->asset_data->load_type == AssetData::LoadType::LoadFinished)
+  {
+    internal_texture_data->texture_data = std::move(texture_data);
+    internal_texture_data->asset_data->load_type = AssetData::LoadType::LoadFinalyzed;
+  }
+}
+
+void CustomResourceManager::XFBTriggered(std::string_view)
+{
+  std::set<std::size_t> session_ids_reloaded_this_frame;
+
+  // Look for any assets requested to be reloaded
+  {
+    decltype(m_assets_to_reload) assets_to_reload;
+
+    if (m_reload_mutex.try_lock())
+    {
+      std::swap(assets_to_reload, m_assets_to_reload);
+      m_reload_mutex.unlock();
+    }
+
+    for (const auto& asset_id : assets_to_reload)
+    {
+      if (const auto it = m_asset_id_to_session_id.find(asset_id);
+          it != m_asset_id_to_session_id.end())
+      {
+        const auto session_id = it->second;
+        session_ids_reloaded_this_frame.insert(session_id);
+        AssetData& asset_data = m_session_id_to_asset_data[session_id];
+        asset_data.load_type = AssetData::LoadType::PendingReload;
+        asset_data.has_errors = false;
+        for (const auto owner_session_id : asset_data.asset_owners)
+        {
+          AssetData& owner_asset_data = m_session_id_to_asset_data[owner_session_id];
+          if (owner_asset_data.load_type == AssetData::LoadType::LoadFinalyzed)
+          {
+            owner_asset_data.load_type = AssetData::LoadType::DependenciesChanged;
+          }
+        }
+        m_pending_assets.put(it->second, asset_data.asset.get());
+      }
+    }
+  }
+
+  if (m_ram_used > m_max_ram_available)
+  {
+    const u64 threshold_ram = 0.8f * m_max_ram_available;
+    u64 ram_used = m_ram_used;
+
+    // Clear out least recently used resources until
+    // we get safely in our threshold
+    while (ram_used > threshold_ram && m_loaded_assets.size() > 0)
+    {
+      const auto asset = m_loaded_assets.pop();
+      ram_used -= asset->GetByteSizeInMemory();
+
+      AssetData& asset_data = m_session_id_to_asset_data[asset->GetSessionId()];
+
+      if (asset_data.type == AssetData::AssetType::TextureData)
+      {
+        m_texture_data_asset_cache.erase(asset->GetAssetId());
+      }
+      asset_data.asset.reset();
+      asset_data.load_type = AssetData::LoadType::Unloaded;
+    }
+
+    // Recalculate to ensure accuracy
+    m_ram_used = 0;
+    for (const auto asset : m_loaded_assets.elements())
+    {
+      m_ram_used += asset->GetByteSizeInMemory();
+    }
+  }
+
+  if (m_pending_assets.empty())
+    return;
+
+  const auto asset_session_ids_loaded =
+      m_asset_loader.LoadAssets(m_pending_assets.elements(), m_ram_used, m_max_ram_available);
+  for (const std::size_t session_id : asset_session_ids_loaded)
+  {
+    // While unlikely, if we loaded an asset in the previous frame but it was reloaded
+    // this frame, we should ignore this load and wait on the reload
+    if (session_ids_reloaded_this_frame.count(session_id) > 0) [[unlikely]]
+      continue;
+
+    m_pending_assets.erase(session_id);
+
+    AssetData& asset_data = m_session_id_to_asset_data[session_id];
+    m_loaded_assets.put(session_id, asset_data.asset.get());
+    asset_data.load_type = AssetData::LoadType::LoadFinished;
+    m_ram_used += asset_data.asset->GetByteSizeInMemory();
+
+    for (const auto owner_session_id : asset_data.asset_owners)
+    {
+      AssetData& owner_asset_data = m_session_id_to_asset_data[owner_session_id];
+      if (owner_asset_data.load_type == AssetData::LoadType::LoadFinalyzed)
+      {
+        owner_asset_data.load_type = AssetData::LoadType::DependenciesChanged;
+      }
+    }
+  }
+}
+
+}  // namespace VideoCommon
diff --git a/Source/Core/VideoCommon/Assets/CustomResourceManager.h b/Source/Core/VideoCommon/Assets/CustomResourceManager.h
new file mode 100644
index 0000000000..b54b53400d
--- /dev/null
+++ b/Source/Core/VideoCommon/Assets/CustomResourceManager.h
@@ -0,0 +1,182 @@
+// Copyright 2025 Dolphin Emulator Project
+// SPDX-License-Identifier: GPL-2.0-or-later
+
+#pragma once
+
+#include <list>
+#include <map>
+#include <memory>
+#include <optional>
+#include <set>
+#include <string>
+#include <string_view>
+#include <vector>
+
+#include "Common/CommonTypes.h"
+#include "Common/HookableEvent.h"
+
+#include "VideoCommon/Assets/CustomAsset.h"
+#include "VideoCommon/Assets/CustomAssetLibrary.h"
+#include "VideoCommon/Assets/CustomAssetLoader2.h"
+#include "VideoCommon/Assets/CustomTextureData.h"
+
+namespace VideoCommon
+{
+class GameTextureAsset;
+
+class CustomResourceManager
+{
+public:
+  void Initialize();
+  void Shutdown();
+
+  void Reset();
+
+  // Requests that an asset that exists be reloaded
+  void ReloadAsset(const CustomAssetLibrary::AssetID& asset_id);
+
+  void XFBTriggered(std::string_view texture_hash);
+
+  CustomTextureData*
+  GetTextureDataFromAsset(const CustomAssetLibrary::AssetID& asset_id,
+                          std::shared_ptr<VideoCommon::CustomAssetLibrary> library);
+
+private:
+  struct AssetData
+  {
+    std::unique_ptr<CustomAsset> asset;
+    CustomAssetLibrary::TimeType load_request_time = {};
+    std::set<std::size_t> asset_owners;
+
+    enum class AssetType
+    {
+      TextureData
+    };
+    AssetType type;
+
+    enum class LoadType
+    {
+      PendingReload,
+      LoadFinished,
+      LoadFinalyzed,
+      DependenciesChanged,
+      Unloaded
+    };
+    LoadType load_type = LoadType::PendingReload;
+    bool has_errors = false;
+  };
+
+  struct InternalTextureDataResource
+  {
+    AssetData* asset_data = nullptr;
+    VideoCommon::GameTextureAsset* asset = nullptr;
+    std::shared_ptr<TextureData> texture_data;
+  };
+
+  void LoadTextureDataAsset(const CustomAssetLibrary::AssetID& asset_id,
+                            std::shared_ptr<VideoCommon::CustomAssetLibrary> library,
+                            InternalTextureDataResource* internal_texture_data);
+
+  template <typename T>
+  T* CreateAsset(const CustomAssetLibrary::AssetID& asset_id, AssetData::AssetType asset_type,
+                 std::shared_ptr<VideoCommon::CustomAssetLibrary> library)
+  {
+    const auto [it, added] =
+        m_asset_id_to_session_id.try_emplace(asset_id, m_session_id_to_asset_data.size());
+
+    if (added)
+    {
+      AssetData asset_data;
+      asset_data.asset = std::make_unique<T>(library, asset_id, it->second);
+      asset_data.type = asset_type;
+      asset_data.has_errors = false;
+      asset_data.load_type = AssetData::LoadType::PendingReload;
+      asset_data.load_request_time = {};
+
+      m_session_id_to_asset_data.insert_or_assign(it->second, std::move(asset_data));
+
+      // Synchronize the priority cache session id
+      m_pending_assets.prepare();
+      m_loaded_assets.prepare();
+    }
+    auto& asset_data_from_session = m_session_id_to_asset_data[it->second];
+
+    // Asset got unloaded, rebuild it with the same metadata
+    if (!asset_data_from_session.asset)
+    {
+      asset_data_from_session.asset = std::make_unique<T>(library, asset_id, it->second);
+      asset_data_from_session.has_errors = false;
+      asset_data_from_session.load_type = AssetData::LoadType::PendingReload;
+    }
+
+    return static_cast<T*>(asset_data_from_session.asset.get());
+  }
+
+  class LeastRecentlyUsedCache
+  {
+  public:
+    const std::list<CustomAsset*>& elements() const { return m_asset_cache; }
+
+    void put(u64 asset_session_id, CustomAsset* asset)
+    {
+      erase(asset_session_id);
+      m_asset_cache.push_front(asset);
+      m_iterator_lookup[m_asset_cache.front()->GetSessionId()] = m_asset_cache.begin();
+    }
+
+    CustomAsset* pop()
+    {
+      if (m_asset_cache.empty()) [[unlikely]]
+        return nullptr;
+      const auto ret = m_asset_cache.back();
+      if (ret != nullptr)
+      {
+        m_iterator_lookup[ret->GetSessionId()].reset();
+      }
+      m_asset_cache.pop_back();
+      return ret;
+    }
+
+    void prepare() { m_iterator_lookup.push_back(std::nullopt); }
+
+    void erase(u64 asset_session_id)
+    {
+      if (const auto iter = m_iterator_lookup[asset_session_id])
+      {
+        m_asset_cache.erase(*iter);
+        m_iterator_lookup[asset_session_id].reset();
+      }
+    }
+
+    bool empty() const { return m_asset_cache.empty(); }
+
+    std::size_t size() const { return m_asset_cache.size(); }
+
+  private:
+    std::list<CustomAsset*> m_asset_cache;
+
+    // Note: this vector is expected to be kept in sync with
+    // the total amount of (unique) assets ever seen
+    std::vector<std::optional<decltype(m_asset_cache)::iterator>> m_iterator_lookup;
+  };
+
+  LeastRecentlyUsedCache m_loaded_assets;
+  LeastRecentlyUsedCache m_pending_assets;
+
+  std::map<std::size_t, AssetData> m_session_id_to_asset_data;
+  std::map<CustomAssetLibrary::AssetID, std::size_t> m_asset_id_to_session_id;
+
+  u64 m_ram_used = 0;
+  u64 m_max_ram_available = 0;
+
+  std::map<CustomAssetLibrary::AssetID, InternalTextureDataResource> m_texture_data_asset_cache;
+
+  std::mutex m_reload_mutex;
+  std::set<CustomAssetLibrary::AssetID> m_assets_to_reload;
+
+  CustomAssetLoader2 m_asset_loader;
+
+  Common::EventHook m_xfb_event;
+};
+
+}  // namespace VideoCommon
diff --git a/Source/Core/VideoCommon/Assets/DirectFilesystemAssetLibrary.cpp b/Source/Core/VideoCommon/Assets/DirectFilesystemAssetLibrary.cpp
index 90d77d8ec9..68ac16a88a 100644
--- a/Source/Core/VideoCommon/Assets/DirectFilesystemAssetLibrary.cpp
+++ b/Source/Core/VideoCommon/Assets/DirectFilesystemAssetLibrary.cpp
@@ -13,6 +13,8 @@
 #include "Common/JsonUtil.h"
 #include "Common/Logging/Log.h"
 #include "Common/StringUtil.h"
+#include "Core/System.h"
+#include "VideoCommon/Assets/CustomResourceManager.h"
 #include "VideoCommon/Assets/MaterialAsset.h"
 #include "VideoCommon/Assets/MeshAsset.h"
 #include "VideoCommon/Assets/ShaderAsset.h"
@@ -53,7 +55,7 @@ std::size_t GetAssetSize(const CustomTextureData& data)
 CustomAssetLibrary::TimeType
 DirectFilesystemAssetLibrary::GetLastAssetWriteTime(const AssetID& asset_id) const
 {
-  std::lock_guard lk(m_lock);
+  std::lock_guard lk(m_asset_map_lock);
   if (auto iter = m_assetid_to_asset_map_path.find(asset_id);
       iter != m_assetid_to_asset_map_path.end())
   {
@@ -434,10 +436,42 @@ CustomAssetLibrary::LoadInfo DirectFilesystemAssetLibrary::LoadTexture(const Ass
 }
 
 void DirectFilesystemAssetLibrary::SetAssetIDMapData(const AssetID& asset_id,
-                                                     AssetMap asset_path_map)
+                                                     VideoCommon::Assets::AssetMap asset_path_map)
 {
-  std::lock_guard lk(m_lock);
-  m_assetid_to_asset_map_path[asset_id] = std::move(asset_path_map);
+  VideoCommon::Assets::AssetMap previous_asset_map;
+  {
+    std::lock_guard lk(m_asset_map_lock);
+    previous_asset_map = m_assetid_to_asset_map_path[asset_id];
+  }
+
+  {
+    std::lock_guard lk(m_path_map_lock);
+    for (const auto& [name, path] : previous_asset_map)
+    {
+      m_path_to_asset_id.erase(PathToString(path));
+    }
+
+    for (const auto& [name, path] : asset_path_map)
+    {
+      m_path_to_asset_id[PathToString(path)] = asset_id;
+    }
+  }
+
+  {
+    std::lock_guard lk(m_asset_map_lock);
+    m_assetid_to_asset_map_path[asset_id] = std::move(asset_path_map);
+  }
+}
+
+void DirectFilesystemAssetLibrary::PathModified(std::string_view path)
+{
+  std::lock_guard lk(m_path_map_lock);
+  if (const auto iter = m_path_to_asset_id.find(path); iter != m_path_to_asset_id.end())
+  {
+    auto& system = Core::System::GetInstance();
+    auto& resource_manager = system.GetCustomResourceManager();
+    resource_manager.ReloadAsset(iter->second);
+  }
 }
 
 bool DirectFilesystemAssetLibrary::LoadMips(const std::filesystem::path& asset_path,
@@ -492,10 +526,10 @@ bool DirectFilesystemAssetLibrary::LoadMips(const std::filesystem::path& asset_p
   return true;
 }
 
-DirectFilesystemAssetLibrary::AssetMap
+VideoCommon::Assets::AssetMap
 DirectFilesystemAssetLibrary::GetAssetMapForID(const AssetID& asset_id) const
 {
-  std::lock_guard lk(m_lock);
+  std::lock_guard lk(m_asset_map_lock);
   if (auto iter = m_assetid_to_asset_map_path.find(asset_id);
       iter != m_assetid_to_asset_map_path.end())
   {
diff --git a/Source/Core/VideoCommon/Assets/DirectFilesystemAssetLibrary.h b/Source/Core/VideoCommon/Assets/DirectFilesystemAssetLibrary.h
index c4d99baf82..cbc72a0e9a 100644
--- a/Source/Core/VideoCommon/Assets/DirectFilesystemAssetLibrary.h
+++ b/Source/Core/VideoCommon/Assets/DirectFilesystemAssetLibrary.h
@@ -8,18 +8,17 @@
 #include <mutex>
 #include <string>
 
-#include "VideoCommon/Assets/CustomAssetLibrary.h"
 #include "VideoCommon/Assets/CustomTextureData.h"
+#include "VideoCommon/Assets/Types.h"
+#include "VideoCommon/Assets/WatchableFilesystemAssetLibrary.h"
 
 namespace VideoCommon
 {
 // This class implements 'CustomAssetLibrary' and loads any assets
 // directly from the filesystem
-class DirectFilesystemAssetLibrary final : public CustomAssetLibrary
+class DirectFilesystemAssetLibrary final : public WatchableFilesystemAssetLibrary
 {
 public:
-  using AssetMap = std::map<std::string, std::filesystem::path>;
-
   LoadInfo LoadTexture(const AssetID& asset_id, TextureData* data) override;
   LoadInfo LoadPixelShader(const AssetID& asset_id, PixelShaderData* data) override;
   LoadInfo LoadMaterial(const AssetID& asset_id, MaterialData* data) override;
@@ -31,16 +30,21 @@ public:
   // Assigns the asset id to a map of files, how this map is read is dependent on the data
   // For instance, a raw texture would expect the map to have a single entry and load that
   // file as the asset.  But a model file data might have its data spread across multiple files
-  void SetAssetIDMapData(const AssetID& asset_id, AssetMap asset_path_map);
+  void SetAssetIDMapData(const AssetID& asset_id, Assets::AssetMap asset_path_map);
 
 private:
+  void PathModified(std::string_view path) override;
+
   // Loads additional mip levels into the texture structure until _mip<N> texture is not found
   bool LoadMips(const std::filesystem::path& asset_path, CustomTextureData::ArraySlice* data);
 
   // Gets the asset map given an asset id
-  AssetMap GetAssetMapForID(const AssetID& asset_id) const;
+  Assets::AssetMap GetAssetMapForID(const AssetID& asset_id) const;
 
-  mutable std::mutex m_lock;
-  std::map<AssetID, std::map<std::string, std::filesystem::path>> m_assetid_to_asset_map_path;
+  mutable std::mutex m_asset_map_lock;
+  std::map<AssetID, Assets::AssetMap> m_assetid_to_asset_map_path;
+
+  mutable std::mutex m_path_map_lock;
+  std::map<std::string, AssetID, std::less<>> m_path_to_asset_id;
 };
 }  // namespace VideoCommon
diff --git a/Source/Core/VideoCommon/Assets/Types.h b/Source/Core/VideoCommon/Assets/Types.h
new file mode 100644
index 0000000000..c10d45587c
--- /dev/null
+++ b/Source/Core/VideoCommon/Assets/Types.h
@@ -0,0 +1,13 @@
+// Copyright 2024 Dolphin Emulator Project
+// SPDX-License-Identifier: GPL-2.0-or-later
+
+#pragma once
+
+#include <filesystem>
+#include <map>
+#include <string>
+
+namespace VideoCommon::Assets
+{
+using AssetMap = std::map<std::string, std::filesystem::path>;
+}
diff --git a/Source/Core/VideoCommon/Assets/WatchableFilesystemAssetLibrary.h b/Source/Core/VideoCommon/Assets/WatchableFilesystemAssetLibrary.h
new file mode 100644
index 0000000000..196d311397
--- /dev/null
+++ b/Source/Core/VideoCommon/Assets/WatchableFilesystemAssetLibrary.h
@@ -0,0 +1,14 @@
+// Copyright 2024 Dolphin Emulator Project
+// SPDX-License-Identifier: GPL-2.0-or-later
+
+#pragma once
+
+#include "Common/FilesystemWatcher.h"
+#include "VideoCommon/Assets/CustomAssetLibrary.h"
+
+namespace VideoCommon
+{
+class WatchableFilesystemAssetLibrary : public CustomAssetLibrary, public Common::FilesystemWatcher
+{
+};
+}  // namespace VideoCommon
diff --git a/Source/Core/VideoCommon/CMakeLists.txt b/Source/Core/VideoCommon/CMakeLists.txt
index 6361e639c4..bf7e3c70b3 100644
--- a/Source/Core/VideoCommon/CMakeLists.txt
+++ b/Source/Core/VideoCommon/CMakeLists.txt
@@ -14,6 +14,10 @@ add_library(videocommon
   Assets/CustomAssetLibrary.h
   Assets/CustomAssetLoader.cpp
   Assets/CustomAssetLoader.h
+  Assets/CustomAssetLoader2.cpp
+  Assets/CustomAssetLoader2.h
+  Assets/CustomResourceManager.cpp
+  Assets/CustomResourceManager.h
   Assets/CustomTextureData.cpp
   Assets/CustomTextureData.h
   Assets/DirectFilesystemAssetLibrary.cpp
@@ -26,6 +30,8 @@ add_library(videocommon
   Assets/ShaderAsset.h
   Assets/TextureAsset.cpp
   Assets/TextureAsset.h
+  Assets/Types.h
+  Assets/WatchableFilesystemAssetLibrary.h
   AsyncRequests.cpp
   AsyncRequests.h
   AsyncShaderCompiler.cpp
diff --git a/Source/Core/VideoCommon/GraphicsModSystem/Config/GraphicsModAsset.h b/Source/Core/VideoCommon/GraphicsModSystem/Config/GraphicsModAsset.h
index 53d8d71892..d623a00e2e 100644
--- a/Source/Core/VideoCommon/GraphicsModSystem/Config/GraphicsModAsset.h
+++ b/Source/Core/VideoCommon/GraphicsModSystem/Config/GraphicsModAsset.h
@@ -7,12 +7,13 @@
 
 #include <picojson.h>
 
-#include "VideoCommon/Assets/DirectFilesystemAssetLibrary.h"
+#include "VideoCommon/Assets/CustomAssetLibrary.h"
+#include "VideoCommon/Assets/Types.h"
 
 struct GraphicsModAssetConfig
 {
   VideoCommon::CustomAssetLibrary::AssetID m_asset_id;
-  VideoCommon::DirectFilesystemAssetLibrary::AssetMap m_map;
+  VideoCommon::Assets::AssetMap m_map;
 
   void SerializeToConfig(picojson::object& json_obj) const;
   bool DeserializeFromConfig(const picojson::object& obj);
diff --git a/Source/Core/VideoCommon/HiresTextures.cpp b/Source/Core/VideoCommon/HiresTextures.cpp
index b64c521e08..9864e28544 100644
--- a/Source/Core/VideoCommon/HiresTextures.cpp
+++ b/Source/Core/VideoCommon/HiresTextures.cpp
@@ -25,7 +25,7 @@
 #include "Core/ConfigManager.h"
 #include "Core/System.h"
 #include "VideoCommon/Assets/CustomAsset.h"
-#include "VideoCommon/Assets/CustomAssetLoader.h"
+#include "VideoCommon/Assets/CustomResourceManager.h"
 #include "VideoCommon/Assets/DirectFilesystemAssetLibrary.h"
 #include "VideoCommon/OnScreenDisplay.h"
 #include "VideoCommon/VideoConfig.h"
@@ -95,10 +95,11 @@ void HiresTexture::Update()
       GetTextureDirectoriesWithGameId(File::GetUserPath(D_HIRESTEXTURES_IDX), game_id);
   const std::vector<std::string> extensions{".png", ".dds"};
 
-  auto& system = Core::System::GetInstance();
-
   for (const auto& texture_directory : texture_directories)
   {
+    // Watch this directory for any texture reloads
+    s_file_library->Watch(texture_directory);
+
     const auto texture_paths =
         Common::DoFileSearch({texture_directory}, extensions, /*recursive*/ true);
 
@@ -130,10 +131,10 @@ void HiresTexture::Update()
 
           if (g_ActiveConfig.bCacheHiresTextures)
           {
-            auto hires_texture = std::make_shared<HiresTexture>(
-                has_arbitrary_mipmaps,
-                system.GetCustomAssetLoader().LoadGameTexture(filename, s_file_library));
-            s_hires_texture_cache.try_emplace(filename, std::move(hires_texture));
+            auto hires_texture =
+                std::make_shared<HiresTexture>(has_arbitrary_mipmaps, std::move(filename));
+            static_cast<void>(hires_texture->LoadTexture());
+            s_hires_texture_cache.try_emplace(hires_texture->GetId(), hires_texture);
           }
         }
       }
@@ -167,7 +168,7 @@ void HiresTexture::Clear()
 
 std::shared_ptr<HiresTexture> HiresTexture::Search(const TextureInfo& texture_info)
 {
-  const auto [base_filename, has_arb_mipmaps] = GetNameArbPair(texture_info);
+  auto [base_filename, has_arb_mipmaps] = GetNameArbPair(texture_info);
   if (base_filename == "")
     return nullptr;
 
@@ -177,24 +178,27 @@ std::shared_ptr<HiresTexture> HiresTexture::Search(const TextureInfo& texture_in
   }
   else
   {
-    auto& system = Core::System::GetInstance();
-    auto hires_texture = std::make_shared<HiresTexture>(
-        has_arb_mipmaps,
-        system.GetCustomAssetLoader().LoadGameTexture(base_filename, s_file_library));
+    auto hires_texture = std::make_shared<HiresTexture>(has_arb_mipmaps, std::move(base_filename));
     if (g_ActiveConfig.bCacheHiresTextures)
     {
-      s_hires_texture_cache.try_emplace(base_filename, hires_texture);
+      s_hires_texture_cache.try_emplace(hires_texture->GetId(), hires_texture);
     }
     return hires_texture;
   }
 }
 
-HiresTexture::HiresTexture(bool has_arbitrary_mipmaps,
-                           std::shared_ptr<VideoCommon::GameTextureAsset> asset)
-    : m_has_arbitrary_mipmaps(has_arbitrary_mipmaps), m_game_texture(std::move(asset))
+HiresTexture::HiresTexture(bool has_arbitrary_mipmaps, std::string id)
+    : m_has_arbitrary_mipmaps(has_arbitrary_mipmaps), m_id(std::move(id))
 {
 }
 
+VideoCommon::CustomTextureData* HiresTexture::LoadTexture() const
+{
+  auto& system = Core::System::GetInstance();
+  auto& custom_resource_manager = system.GetCustomResourceManager();
+  return custom_resource_manager.GetTextureDataFromAsset(m_id, s_file_library);
+}
+
 std::set<std::string> GetTextureDirectoriesWithGameId(const std::string& root_directory,
                                                       const std::string& game_id)
 {
diff --git a/Source/Core/VideoCommon/HiresTextures.h b/Source/Core/VideoCommon/HiresTextures.h
index 5312285dd0..ceb5b3ce2b 100644
--- a/Source/Core/VideoCommon/HiresTextures.h
+++ b/Source/Core/VideoCommon/HiresTextures.h
@@ -10,7 +10,6 @@
 
 #include "Common/CommonTypes.h"
 #include "VideoCommon/Assets/CustomTextureData.h"
-#include "VideoCommon/Assets/TextureAsset.h"
 #include "VideoCommon/TextureConfig.h"
 #include "VideoCommon/TextureInfo.h"
 
@@ -27,12 +26,13 @@ public:
   static void Shutdown();
   static std::shared_ptr<HiresTexture> Search(const TextureInfo& texture_info);
 
-  HiresTexture(bool has_arbitrary_mipmaps, std::shared_ptr<VideoCommon::GameTextureAsset> asset);
+  HiresTexture(bool has_arbitrary_mipmaps, std::string id);
 
   bool HasArbitraryMipmaps() const { return m_has_arbitrary_mipmaps; }
-  const std::shared_ptr<VideoCommon::GameTextureAsset>& GetAsset() const { return m_game_texture; }
+  VideoCommon::CustomTextureData* LoadTexture() const;
+  const std::string& GetId() const { return m_id; }
 
 private:
   bool m_has_arbitrary_mipmaps = false;
-  std::shared_ptr<VideoCommon::GameTextureAsset> m_game_texture;
+  std::string m_id;
 };
diff --git a/Source/Core/VideoCommon/TextureCacheBase.cpp b/Source/Core/VideoCommon/TextureCacheBase.cpp
index b370481c04..3e01c0226e 100644
--- a/Source/Core/VideoCommon/TextureCacheBase.cpp
+++ b/Source/Core/VideoCommon/TextureCacheBase.cpp
@@ -37,13 +37,13 @@
 #include "VideoCommon/AbstractFramebuffer.h"
 #include "VideoCommon/AbstractGfx.h"
 #include "VideoCommon/AbstractStagingTexture.h"
+#include "VideoCommon/Assets/CustomResourceManager.h"
 #include "VideoCommon/Assets/CustomTextureData.h"
 #include "VideoCommon/BPMemory.h"
 #include "VideoCommon/FramebufferManager.h"
 #include "VideoCommon/GraphicsModSystem/Runtime/FBInfo.h"
 #include "VideoCommon/GraphicsModSystem/Runtime/GraphicsModActionData.h"
 #include "VideoCommon/GraphicsModSystem/Runtime/GraphicsModManager.h"
-#include "VideoCommon/HiresTextures.h"
 #include "VideoCommon/OpcodeDecoding.h"
 #include "VideoCommon/PixelShaderManager.h"
 #include "VideoCommon/Present.h"
@@ -262,25 +262,10 @@ void TextureCacheBase::SetBackupConfig(const VideoConfig& config)
 
 bool TextureCacheBase::DidLinkedAssetsChange(const TCacheEntry& entry)
 {
-  for (const auto& cached_asset : entry.linked_game_texture_assets)
-  {
-    if (cached_asset.m_asset)
-    {
-      if (cached_asset.m_asset->GetLastLoadedTime() > cached_asset.m_cached_write_time)
-        return true;
-    }
-  }
+  if (!entry.hires_texture)
+    return false;
 
-  for (const auto& cached_asset : entry.linked_asset_dependencies)
-  {
-    if (cached_asset.m_asset)
-    {
-      if (cached_asset.m_asset->GetLastLoadedTime() > cached_asset.m_cached_write_time)
-        return true;
-    }
-  }
-
-  return false;
+  return entry.last_custom_texture_data != entry.hires_texture->LoadTexture();
 }
 
 RcTcacheEntry TextureCacheBase::ApplyPaletteToEntry(RcTcacheEntry& entry, const u8* palette,
@@ -1566,80 +1551,42 @@ RcTcacheEntry TextureCacheBase::GetTexture(const int textureCacheSafetyColorSamp
     InvalidateTexture(oldest_entry);
   }
 
-  std::vector<VideoCommon::CachedAsset<VideoCommon::GameTextureAsset>> cached_game_assets;
-  std::vector<std::shared_ptr<VideoCommon::TextureData>> data_for_assets;
+  std::shared_ptr<HiresTexture> hires_texture;
   bool has_arbitrary_mipmaps = false;
   bool skip_texture_dump = false;
-  std::shared_ptr<HiresTexture> hires_texture;
+  VideoCommon::CustomTextureData* custom_texture_data = nullptr;
   if (g_ActiveConfig.bHiresTextures)
   {
     hires_texture = HiresTexture::Search(texture_info);
     if (hires_texture)
     {
-      auto asset = hires_texture->GetAsset();
-      const auto loaded_time = asset->GetLastLoadedTime();
-      cached_game_assets.push_back(
-          VideoCommon::CachedAsset<VideoCommon::GameTextureAsset>{std::move(asset), loaded_time});
       has_arbitrary_mipmaps = hires_texture->HasArbitraryMipmaps();
+      custom_texture_data = hires_texture->LoadTexture();
       skip_texture_dump = true;
     }
   }
 
-  std::vector<VideoCommon::CachedAsset<VideoCommon::CustomAsset>> additional_dependencies;
-
   std::string texture_name = "";
 
   if (g_ActiveConfig.bGraphicMods)
   {
     u32 height = texture_info.GetRawHeight();
     u32 width = texture_info.GetRawWidth();
-    if (hires_texture)
-    {
-      auto asset = hires_texture->GetAsset();
-      if (asset)
-      {
-        auto data = asset->GetData();
-        if (data)
-        {
-          if (!data->m_texture.m_slices.empty())
-          {
-            if (!data->m_texture.m_slices[0].m_levels.empty())
-            {
-              height = data->m_texture.m_slices[0].m_levels[0].height;
-              width = data->m_texture.m_slices[0].m_levels[0].width;
-            }
-          }
-        }
-      }
-    }
     texture_name = texture_info.CalculateTextureName().GetFullName();
-    GraphicsModActionData::TextureCreate texture_create{
-        texture_name, width, height, &cached_game_assets, &additional_dependencies};
+    GraphicsModActionData::TextureCreate texture_create{texture_name, width, height, nullptr,
+                                                        nullptr};
     for (const auto& action : g_graphics_mod_manager->GetTextureCreateActions(texture_name))
     {
       action->OnTextureCreate(&texture_create);
     }
   }
 
-  data_for_assets.reserve(cached_game_assets.size());
-  for (auto& cached_asset : cached_game_assets)
-  {
-    auto data = cached_asset.m_asset->GetData();
-    if (data)
-    {
-      if (cached_asset.m_asset->Validate(texture_info.GetRawWidth(), texture_info.GetRawHeight()))
-      {
-        data_for_assets.push_back(data);
-      }
-    }
-  }
-
   auto entry =
       CreateTextureEntry(TextureCreationInfo{base_hash, full_hash, bytes_per_block, palette_size},
-                         texture_info, textureCacheSafetyColorSampleSize,
-                         std::move(data_for_assets), has_arbitrary_mipmaps, skip_texture_dump);
-  entry->linked_game_texture_assets = std::move(cached_game_assets);
-  entry->linked_asset_dependencies = std::move(additional_dependencies);
+                         texture_info, textureCacheSafetyColorSampleSize, custom_texture_data,
+                         has_arbitrary_mipmaps, skip_texture_dump);
+  entry->hires_texture = std::move(hires_texture);
+  entry->last_custom_texture_data = custom_texture_data;
   entry->texture_info_name = std::move(texture_name);
   return entry;
 }
@@ -1649,8 +1596,7 @@ RcTcacheEntry TextureCacheBase::GetTexture(const int textureCacheSafetyColorSamp
 // expected because each texture is loaded into a texture array
 RcTcacheEntry TextureCacheBase::CreateTextureEntry(
     const TextureCreationInfo& creation_info, const TextureInfo& texture_info,
-    const int safety_color_sample_size,
-    std::vector<std::shared_ptr<VideoCommon::TextureData>> assets_data,
+    const int safety_color_sample_size, VideoCommon::CustomTextureData* custom_texture_data,
     const bool custom_arbitrary_mipmaps, bool skip_texture_dump)
 {
 #ifdef __APPLE__
@@ -1660,33 +1606,22 @@ RcTcacheEntry TextureCacheBase::CreateTextureEntry(
 #endif
 
   RcTcacheEntry entry;
-  if (!assets_data.empty())
+  if (custom_texture_data)
   {
-    const auto calculate_max_levels = [&]() {
-      const auto max_element = std::ranges::max_element(
-          assets_data, {}, [](const auto& v) { return v->m_texture.m_slices[0].m_levels.size(); });
-      return (*max_element)->m_texture.m_slices[0].m_levels.size();
-    };
-    const u32 texLevels = no_mips ? 1 : (u32)calculate_max_levels();
-    const auto& first_level = assets_data[0]->m_texture.m_slices[0].m_levels[0];
-    const TextureConfig config(first_level.width, first_level.height, texLevels,
-                               static_cast<u32>(assets_data.size()), 1, first_level.format, 0,
-                               AbstractTextureType::Texture_2DArray);
+    const u32 texLevels = no_mips ? 1 : (u32)custom_texture_data->m_slices[0].m_levels.size();
+    const auto& first_level = custom_texture_data->m_slices[0].m_levels[0];
+    const TextureConfig config(first_level.width, first_level.height, texLevels, 1, 1,
+                               first_level.format, 0, AbstractTextureType::Texture_2DArray);
     entry = AllocateCacheEntry(config);
     if (!entry) [[unlikely]]
       return entry;
-    for (u32 data_index = 0; data_index < static_cast<u32>(assets_data.size()); data_index++)
+    const auto& slice = custom_texture_data->m_slices[0];
+    for (u32 level_index = 0;
+         level_index < std::min(texLevels, static_cast<u32>(slice.m_levels.size())); ++level_index)
     {
-      const auto& asset = assets_data[data_index];
-      const auto& slice = asset->m_texture.m_slices[0];
-      for (u32 level_index = 0;
-           level_index < std::min(texLevels, static_cast<u32>(slice.m_levels.size()));
-           ++level_index)
-      {
-        const auto& level = slice.m_levels[level_index];
-        entry->texture->Load(level_index, level.width, level.height, level.row_length,
-                             level.data.data(), level.data.size(), data_index);
-      }
+      const auto& level = slice.m_levels[level_index];
+      entry->texture->Load(level_index, level.width, level.height, level.row_length,
+                           level.data.data(), level.data.size());
     }
 
     entry->has_arbitrary_mips = custom_arbitrary_mipmaps;
diff --git a/Source/Core/VideoCommon/TextureCacheBase.h b/Source/Core/VideoCommon/TextureCacheBase.h
index 532feaca7d..802ae7c2ee 100644
--- a/Source/Core/VideoCommon/TextureCacheBase.h
+++ b/Source/Core/VideoCommon/TextureCacheBase.h
@@ -24,6 +24,7 @@
 #include "VideoCommon/AbstractTexture.h"
 #include "VideoCommon/Assets/CustomAsset.h"
 #include "VideoCommon/BPMemory.h"
+#include "VideoCommon/HiresTextures.h"
 #include "VideoCommon/TextureConfig.h"
 #include "VideoCommon/TextureDecoder.h"
 #include "VideoCommon/TextureInfo.h"
@@ -167,8 +168,8 @@ struct TCacheEntry
 
   std::string texture_info_name = "";
 
-  std::vector<VideoCommon::CachedAsset<VideoCommon::GameTextureAsset>> linked_game_texture_assets;
-  std::vector<VideoCommon::CachedAsset<VideoCommon::CustomAsset>> linked_asset_dependencies;
+  VideoCommon::CustomTextureData* last_custom_texture_data;
+  std::shared_ptr<HiresTexture> hires_texture;
 
   explicit TCacheEntry(std::unique_ptr<AbstractTexture> tex,
                        std::unique_ptr<AbstractFramebuffer> fb);
@@ -351,11 +352,10 @@ private:
 
   void SetBackupConfig(const VideoConfig& config);
 
-  RcTcacheEntry
-  CreateTextureEntry(const TextureCreationInfo& creation_info, const TextureInfo& texture_info,
-                     int safety_color_sample_size,
-                     std::vector<std::shared_ptr<VideoCommon::TextureData>> assets_data,
-                     bool custom_arbitrary_mipmaps, bool skip_texture_dump);
+  RcTcacheEntry CreateTextureEntry(const TextureCreationInfo& creation_info,
+                                   const TextureInfo& texture_info, int safety_color_sample_size,
+                                   VideoCommon::CustomTextureData* custom_texture_data,
+                                   bool custom_arbitrary_mipmaps, bool skip_texture_dump);
 
   RcTcacheEntry GetXFBFromCache(u32 address, u32 width, u32 height, u32 stride);
 
diff --git a/Source/Core/VideoCommon/VideoBackendBase.cpp b/Source/Core/VideoCommon/VideoBackendBase.cpp
index 73035e0e1b..a4cc35fa09 100644
--- a/Source/Core/VideoCommon/VideoBackendBase.cpp
+++ b/Source/Core/VideoCommon/VideoBackendBase.cpp
@@ -41,6 +41,7 @@
 #endif
 
 #include "VideoCommon/AbstractGfx.h"
+#include "VideoCommon/Assets/CustomResourceManager.h"
 #include "VideoCommon/AsyncRequests.h"
 #include "VideoCommon/BPStructs.h"
 #include "VideoCommon/BoundingBox.h"
@@ -341,12 +342,16 @@ bool VideoBackendBase::InitializeShared(std::unique_ptr<AbstractGfx> gfx,
   }
 
   g_shader_cache->InitializeShaderCache();
+  system.GetCustomResourceManager().Initialize();
 
   return true;
 }
 
 void VideoBackendBase::ShutdownShared()
 {
+  auto& system = Core::System::GetInstance();
+  system.GetCustomResourceManager().Shutdown();
+
   g_frame_dumper.reset();
   g_presenter.reset();
 
@@ -369,7 +374,6 @@ void VideoBackendBase::ShutdownShared()
 
   m_initialized = false;
 
-  auto& system = Core::System::GetInstance();
   VertexLoaderManager::Clear();
   system.GetFifo().Shutdown();
 }
diff --git a/Source/VSProps/Base.Dolphin.props b/Source/VSProps/Base.Dolphin.props
index 3410b9fef6..0e0235dfb2 100644
--- a/Source/VSProps/Base.Dolphin.props
+++ b/Source/VSProps/Base.Dolphin.props
@@ -16,6 +16,7 @@
       <AdditionalIncludeDirectories>$(ExternalsDir)rangeset\include;%(AdditionalIncludeDirectories)</AdditionalIncludeDirectories>
       <AdditionalIncludeDirectories>$(ExternalsDir)Vulkan-Headers\include;%(AdditionalIncludeDirectories)</AdditionalIncludeDirectories>
       <AdditionalIncludeDirectories>$(ExternalsDir)VulkanMemoryAllocator\include;%(AdditionalIncludeDirectories)</AdditionalIncludeDirectories>
+      <AdditionalIncludeDirectories>$(ExternalsDir)watcher\watcher\include;%(AdditionalIncludeDirectories)</AdditionalIncludeDirectories>
       <AdditionalIncludeDirectories>$(ExternalsDir)WIL\include;%(AdditionalIncludeDirectories)</AdditionalIncludeDirectories>
       <!--WIL doesn't have it's own vcxproj/exports, and no externals reference WIL, so this is fine to define only for Dolphin-->
       <PreprocessorDefinitions>WIL_SUPPRESS_EXCEPTIONS;%(PreprocessorDefinitions)</PreprocessorDefinitions>