Game Studios That Shut Down in 2025: Over 25 Studios Closed Their Doors Forever
- Sagar Mankar
- 11 hours ago
- 7 min read
2025 was another rough year for the gaming industry, to say the least. While gamers were busy enjoying their favorite titles, behind the scenes, studios were shutting down one after another. Over 9,000 layoffs and more than 25 full studio closures painted a stark picture, proving that even beloved projects and skilled teams aren’t safe from economic pressures and tough market conditions.
From indie darlings to AAA powerhouses, no one was safe. Here's a comprehensive look at every major studio that closed its doors in 2025:
Studios That Shut Down in 2025:
Toadman Interactive
Freejam
Ubisoft Leamington
Midnight Society
Monolith Productions
Player First Games
WB Games San Diego
nDreams Studio Orbital
nDreams Studio
Studio Fizbin
Mountaintop Studios
Makea Games
Eutechnyx
Cliffhanger Games
Echtra Games
Cobra Mobile
The Initiative
T-Minus Zero Entertainment
The Outsiders
Boss Fight Entertainment
Atomhawk (Canadian office)
Bad Brain Game Studios
Fantastic Pixel Castle
Avalanche Studios Group's Liverpool studio
Toadman Interactive
January kicked off with Swedish studio Toadman Interactive closing down after parent company Enad Global 7 decided to cut costs. According to their official statement, "continued industry challenges" and the studio's inability to secure new work-for-hire contracts sealed their fate. The closure affected 69 employees, though 42 temporarily stayed on to finish existing contracts.
Interestingly, EG7 actually started as Toadman Interactive back in 2013 before evolving into a holding company. The studio had an impressive portfolio including Immortal: Unchained and contributions to major titles like Warhammer Vermintide and The Lord of the Rings Online.
Freejam
Also in January, Freejam announced it was shutting down, citing "current market conditions" and unsustainable server costs for Robocraft 2, which had launched in Early Access in November 2023. As reported by TechRaptor, the studio explained they were "simply unable to launch or sustain development." Both Robocraft titles and CardLife were sunset in the following weeks, with RoboCraft 2 being delisted from Steam.
Ubisoft Leamington
January wasn't done yet. Ubisoft closed its UK-based Leamington studio completely, alongside targeted restructurings at other European locations. According to GamesIndustry.biz, Ubisoft confirmed only a "small number" of Leamington staff transitioned to remote contracts—a small consolation for those affected.
Midnight Society
Midnight Society's closure in January came after a rocky year following their severed ties with controversial streamer Dr Disrespect. The studio had been developing Deadrop, a first-person shooter, for three years. The announcement mentioned 55 developers who lost their jobs. Players who had bought early access were left wondering about refunds, as the game never reached full release.
Three Warner Bros. Game Studios
February brought devastating news when Warner Bros. Games shut down three studios at once: Monolith Productions, Player First Games, and WB Games San Diego. All projects from these studios were canceled, including the highly anticipated Wonder Woman game from Monolith.
According to an email obtained by Polygon, executive JB Perrette cited a "disappointing 2024" and stated the company would focus on just four franchises: Harry Potter/Hogwarts Legacy, Mortal Kombat, DC (primarily Batman), and Game of Thrones. Perrette acknowledged that "the product-market fit and quality of too many of our new releases has really missed the mark."
nDreams Studio Orbital and nDreams Studio
February also saw VR developer nDreams shut down two of its internal studios as part of a 2024 restructuring program. Some workers transitioned to a new internal studio called Compass, but many were laid off.
Studio Fizbin
March brought the closure of Studio Fizbin, which had been around since 2011. Founder and CEO Alexander Pieper revealed that their then-upcoming game Reignbreaker would be their last, released on March 18 before the studio closed.
The Berlin-based studio had been impacted by parent company Thunderful's decision to "drastically reduce internal development" in late 2024. Pieper stated they explored various options to continue after Reignbreaker's launch, but "none of those projects will move us forward, leading us to make this difficult decision."
Mountaintop Studios
Just six months after launching Spectre Divide, Mountaintop Studios announced its closure in March 2025. CEO Nate Mitchell explained the free-to-play tactical shooter hadn't achieved the success needed for sustainability.
Despite a Season 1 launch that attracted 400,000 players, Mitchell wrote, "As time has gone on, we haven't seen enough active players and incoming revenue to cover the day-to-day costs of Spectre and the studio." The studio had previously secured over $35 million in funding and was supported by streamer Shroud.
Pendulo Studios
March also marked the quiet end of Pendulo Studios, a developer that had been prolific for more than 30 years. Creators of titles like the Runaway series, Hollywood Monsters, Blacksad, and the most recent Tintin Reporter - Cigars of the Pharaoh, the studio closed its doors.
However, the closure apparently took place without any official announcement. A former employee told Meristation that Pendulo Studios ceased all activity in March 2025, shortly after layoffs had left the studio with just a minimal core of workers following big job cuts in 2024.
Makea Games
April saw Finnish developer Makea Games announce its closure. CEO and founder Tomi Toikka attributed the decision to "global economic effects" that hit the company "particularly hard." Their parkour game Supermoves struggled to find a sustainable audience, and a PvE horde shooter called Superstrike "unfortunately didn't find its footing in time."
Toikka revealed, "We worked on Supermoves, Superstrike, and the Makea Editor for north of three years, with over 20 employees contributing to make it the best it could be."
Eutechnyx
May brought the end of British developer Eutechnyx, known for their universally panned Ride to Hell: Retribution and work on NASCAR games. After not releasing any titles in 10 years (NASCAR '15 being their last), Eutechnyx Limited was dissolved on May 20, 2025, with Eutechnyx Holdings Limited also entering insolvency.
Cliffhanger Games
EA canceled its Black Panther game and shuttered Cliffhanger Games in late May. The studio had only been announced in July 2023, making this an incredibly short lifespan. According to IGN, EA Entertainment president Laura Miele stated the closure came as EA "sharpens our focus and puts our creative energy behind the most significant growth opportunities."
Echtra Games
In June, Zynga closed Torchlight III developer Echtra Games four years after acquiring the studio. The Take-Two-owned mobile company confirmed the news to IGN, calling it a "strategic realignment."
Echtra had been acquired by Zynga in March 2021 to create a new RPG in partnership with Zynga NaturalMotion, and the deal included the studio's proprietary cross-platform development tools.
Cobra Mobile
Also shutting down in June was Dundee-based Cobra Mobile after 20 years of operation. As reported by The Courier, CEO and founder Mark Ettle cited a "really sad combination of events" including the death of their chairman Peter Mackintosh and clients going bankrupt, leading to significant debt. Ettle explained, "There has been a downturn in the sector, which has made it harder for us to operate moving forward with the roadmap we wanted to follow." The studio was known for titles including Storm In A Teacup and iBomber.
The Initiative
July saw Microsoft close The Initiative studio, killing the much-anticipated Perfect Dark reboot. This was part of Microsoft's broader layoffs affecting 4% of its global workforce. The studio, set up in 2018 with industry heavyweights including leader Darrell Gallagher of Tomb Raider fame, had been partnering with Crystal Dynamics on the project.
T-Minus Zero Entertainment
Late August brought the closure of T-Minus Zero Entertainment, founded by BioWare alumni Rich Vogel in 2023. Chinese publisher NetEase shut down the studio after ceasing its partnership. The studio had been working on a "third-person online multiplayer action game set in a sci-fi universe."
The Outsiders
October brought the closure of Metal: Hellsinger developer The Outsiders by parent company Funcom. The news came days after Funcom confirmed layoffs just months after Dune: Awakening became the "biggest release" in its history.
Founder and creative director David Goldfarb reflected, "Many of us had survived a near-death studio experience years back when Darkborn was cancelled and because of the team's loyalty and refusal to quit, Metal: Hellsinger was born. It will always be a high point for me personally." The Outsiders had also contributed to Dune: Awakening development.
Boss Fight Entertainment
Late October saw Netflix shut down Squid Game: Unleashed developer Boss Fight Entertainment around three years after acquiring the studio. Notably, the U.S. studio was shuttered after Squid Game: Unleashed became a global chart-topper, claiming the no.1 spot in 26 countries. Boss Fight had been founded in 2013, and the closure came just over a year after Netflix appointed Alain Tascan as president of games.
Atomhawk's Canadian Office
In early November, outsourcing studio Atomhawk closed its Canadian office but kept operating in its other locations. The team has contributed to a range of games, including Madden 26, Spirit Lords, Top Eleven, and Eve Valkyrie, offering services like concept art, production design, UI/UX, and marketing art.
UK-based Sumo Digital bought Atomhawk in 2017 for an undisclosed amount, and in 2021, Tencent acquired it as part of its $1.27 billion purchase of Sumo Group.
Bad Brain Game Studios and Fantastic Pixel Castle
Mid-November brought a double blow from NetEase with the closure of Bad Brain Game Studios and Fantastic Pixel Castle on the same day, November 17. Bad Brain studio head Sean Crooks stated they were unable to secure a new partner for their project codenamed Midnight Riders.
Meanwhile, Fantastic Pixel Castle's Greg Street noted that "while there is still a chance we can secure funding after that date, it will depend on how much of the team remains." NetEase had formed Bad Brain Game Studios in 2023 with developers from Ubisoft Toronto.
Avalanche Studios Group's Liverpool Studio
November concluded with Avalanche Studios officially closing its Liverpool studio, resulting in 31 employees losing their jobs. The studio had only opened in 2020, and the closure came after Microsoft paused development on Contraband, a co-op heist game Avalanche had been developing.
NOTE:
Some studios underwent significant changes rather than complete shutdowns:
The Molasses Flood was absorbed into parent company CD Projekt Red in April, with the merger not affecting the availability of The Flame in The Flood and Drake Hollow games
Ballistic Moon was reportedly “effectively closed.” After the Until Dawn remake was released last year, the studio went through a series of layoffs, with reports saying only a handful of employees remain. While still active in “technical terms,” the founders have allegedly been unable to secure funding or a new publisher, and “there is no work being done.”
Splash Damage announced a consultation process affecting all staff in November, leading to significant redundancies but not a complete shutdown
Hypixel Studios faced potential closure when Riot Games canceled Hytale in June after a decade in development, but the original founder returned and saved the studio in November, with the game now set for early access release in January 2026
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