In a recent damning financial update, Don’t Nod, the studio behind games like Lost Records: Bloom & Rage, Aphelion, and once upon a time, Life is Strange, has admitted that it might not be able to keep its doors open beyond January 2027.
The team divulged an update on ‘systemic pressures’ and a lack of funding that hasn’t accounted for the full development costs of their video game pipeline. This might force them to make as many as 90 layoffs in France in the coming months, but if something major doesn’t change soon, the entire studio might need to shut down.
Don’t Nod Faces Chopping Block in France
In a recent financial report, the team at Don’t Nod revealed massive losses, with their H1 2026 revenue dropping 14% and their operating EBITDA being slashed in kind. It’s all about sustainability now, but it might not be enough. Year-over-year, the company’s revenue records dropped 56%, leading to no production costs being recouped.
RELATED: Don’t Nod Working on Major IP for Netflix
Both Aphelion and whatever the studio is working on next, dubbed ‘P14’, have offered nothing so far but financial losses. This means that revenue has not covered operational expenses.
This led the team to make a damning revelation:
Given the available cash and the cash flow forecast, the company’s ability to continue operations depends partly on securing external financing to cover business operation and project development needs. This represents material uncertainty regarding the company’s ability to continue as a going concern beyond January 31, 2027.
Put simply, that means if Don’t Nod can’t secure external financing within the next few months, it might not be able to operate at all beyond January 2027. This means that layoffs are also on the horizon:
With this in mind, DON’T NOD is refocusing its operations in France around a single production line, bringing together the expertise required to launch new projects before the completion of current productions. This organizational initiative is intended to maintain a continuous pipeline of projects and support the Company’s long-term growth.
It aims to strengthen the Group’s operational efficiency by enabling a more efficient allocation of resources, clarifying responsibilities, and focusing expertise more intensely on priority projects.
In this context, the transformation project currently under consideration could lead to a workforce adjustment in France that may involve the reduction of up to 90 positions.
Talks have already started between the company’s leadership, the employees, and their union representatives, but it’s looking bleak for the studio, which has found itself in hot water a few times already in recent years.
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Grant has been gaming for 30+ years and in the industry for 10+. You'll probably find him playing a post-apocalyptic game or an extraction shooter somewhere.
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