Two weeks into 2025, three studios are already closing down

Since the start of 2025, three studio closures along with multiple layoffs have been reported across the industry.

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

Speaking on Toadman's closure, parent company Enad Global 7 wrote: "This decision does not come lightly and follows several initiatives to turn the subsidiary profitable, including the cost-saving measures executed last year. Ongoing Work-for-Hire (WFH) contracts with Daybreak and Cold Iron will be protected in this process, this means that a complete closure of activities will be optimized to fulfill the contract’s deliverables.

"This will have an immediate effect on all employees not engaged in these contracts."

In addition, Enad Global 7 announced 38 employees at its Piranha Games studio will be laid off. These layoffs come after the most recent game in the studio's Mechwarrior series "performed below expectations".

"The team at Piranha truly delivered a high-quality game that exceeded both internal as well as external expectations in terms of quality, story and gameplay," said Enad Global 7's CEO Ji Ham. "Despite the phenomenal work by the team at Piranha, the game failed to reach new audiences and expand its core audience as anticipated and therefore has not met the necessary sales targets, which has forced us to undertake necessary actions."

As well as Toadman, Robocraft 2 developer Freejam has closed its doors. As reported by Tech Raptor, the developer wrote on its discord server that it will now be sunsetting games such as Robocraft 2 and its predecessor, as well as cardboard survival game CardLife. This will be happening "over the coming weeks".

The third studio to reportedly have closed its doors is Counterplay Games, the developer behind PlayStation 5 launch title, Godfall. It was revealed the studio was "disbanded" last month, after it had 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, PlayStation LifeStyle).

These closures and layoffs follow last week's news that Splash Damage had ceased development of Transformers: Reactivate, and that it'll be "scaling down" the studio as result of the game's cancellation.

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

It has been a rough time for the video game industry, and in the last couple of years there have been numerous layoffs and studio closures reported. For more on the subject, be sure to check out Chris Dring's feature: What is going on with layoffs in the video games industry?