Two weeks into 2025, three studios are already closing

Since the start of 2025, the industry has seen three studio closures and numerous layoffs.

Studio closures include Toadman Interactive, which developed games such as third-person shooter Immortal: Unchained and Hero Defense game Bloodsports TV. The studio also offered support for games such as The Lord of the Rings Online and MechWarrior 5: Mercenaries.

Speaking about the closure of Toadman, parent company Enad Global 7 wrote: “This decision has not been taken lightly and follows a number of initiatives aimed at making the subsidiary profitable, including cost-saving measures implemented over the past year. Existing work-to-hire (WFH) contracts with Daybreak and Cold Iron will be protected in this process, meaning that the complete closure of activity will be optimized to meet contract deliverables.

“This will have an immediate impact on all employees not involved in these contracts.”

In addition, Enad Global 7 announced that 38 employees of its studio Piranha Games will be laid off. These layoffs come after the studio’s latest Mechwarrior game “didn’t live up to expectations.”

“The Piranha team has truly created a high-quality game that exceeded both internal and external expectations in terms of quality, story and gameplay,” said Enad Global 7 CEO Ji Ham. “Despite the phenomenal work of the Piranha team, the game failed to reach new audiences and expand its core audience as expected and consequently did not achieve the required sales targets, forcing us to take the necessary action.”

Like Toadman, Freejam, the developer of Robocraft 2, has closed its doors. As Tech Raptor reports, the developer posted on its Discord server that support for games like Robocraft 2 and its predecessor, as well as the cardboard survival game CardLife, will now be discontinued. This will happen “in the coming weeks.”

The third studio to reportedly shut its doors is Counterplay Games, the developer of the PlayStation 5 launch title Godfall. It was revealed that the studio was “dissolved” last month after it worked with Jackalyptic Games on a project. “Unfortunately, we were unable to continue our partnership into the new year and CPG was disbanded,” a Jackalyptic Games employee wrote in a LinkedIn post (thanks to PlayStation LifeStyle).

These closures and layoffs follow news last week that Splash Damage had stopped developing Transformers: Reactivate and that the studio would be “downsized” as a result of the game’s cancellation.

Suicide Squad: Kill the Justice League developer Rocksteady also recently experienced another wave of layoffs, this time just before the end of 2024.

It’s been a tough time for the video game industry, with numerous layoffs and studio closures reported over the past couple of years. For more on this topic, be sure to check out Chris Dring’s article: What’s Happening With Layoffs in the Video Game Industry?