Dreamhaven Confirms Layoffs, Publishing Division Hit as Industry Cuts Continue

Dreamhaven is the latest video game studio to announce layoffs, citing that "too many in the industry are facing similar challenges."

The California-based developer and publisher, founded in 2020 by former Blizzard co-founder Michael Morhaime, confirmed the news earlier this week.

While the company did not disclose the number of employees affected, reports suggest that the cuts impacted a significant portion of its publishing division.

This move comes as a surprise, given Dreamhaven’s relatively young age and small portfolio of games, which include the first-person shooter Wildgate and the cooperative RPG Sunderfolk.

In a statement shared on LinkedIn, CEO Michael Morhaime addressed the layoffs directly. “We made the hard decision to reduce the size of our company, with the primary impact on our Publishing group,” he wrote.

He also acknowledged the contributions of those leaving, adding, “These choices are never easy — they affect talented colleagues who have played a key role in building Dreamhaven’s foundation and supporting what has been an eventful year for us.”

Despite the cuts, Morhaime emphasized that the company would continue supporting its current lineup of titles, including Wildgate and Sunderfolk. According to his post, Dreamhaven is also providing severance packages and helping former employees connect with new opportunities in the industry.

Dreamhaven was founded as something of a “post-Blizzard” project, created by Morhaime, his wife Amy, and a group of veteran developers credited with shaping Blizzard’s golden era through franchises like Warcraft, StarCraft, Diablo, and Overwatch. The company operates two internal studios: Moonshot Games, which developed Wildgate, and Secret Door, which created Sunderfolk. Alongside these in-house projects, Dreamhaven has also published titles from other studios, such as Lynked: Banner of the Spark by FuzzyBot Games and Mechabellum by Game River.

The layoffs at Dreamhaven are part of a wider trend in the gaming industry. Just last week, Crystal Dynamics announced staff reductions following setbacks on its Perfect Dark project, and several other studios have faced similar cuts throughout 2025. Jobs guru Amir Satvat told The GameBusiness that over 50% of jobs lost in video games this year were in California.

While Dreamhaven has yet to deliver a breakout hit, it remains a notable name in gaming circles thanks to its leadership and pedigree.