2025 Starts with Closure of Three Game Studios, Including Godfall Developer
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- In the first weeks of 2025 three game studios are shutting down, and one is facing major layoffs.
- These closures are part of a larger trend of economic challenges in the gaming industry.
- Support studios often rely on a steady flow of external projects to survive.
The video game industry is facing a rocky start to 2025, with three game development studios shutting down, and one is facing major layoffs within the first two weeks of the year.
Counterplay Games, Toadman Interactive, and FreeJam have all closed their doors, highlighting ongoing challenges in the gaming sector. Meanwhile, Splash Damage and its subsidiary BULKHEAD are cutting back on staff.
Counterplay Games, known for the action RPG Godfall, was among the studios to shutter operations. Released initially as a PlayStation 5 and Epic Games Store exclusive, Godfall eventually expanded to PlayStation 4 and other platforms, including Steam, Xbox One, and Xbox Series X/S. Despite these efforts, the studio faced financial struggles that culminated in its closure.
A developer from Jackalyptic, a partner on a collaborative project with Counterplay, confirmed the shutdown, stating, “We couldn’t continue into 2025 due to Counterplay Games closing down.”
On Jan. 9, Toadman Interactive, a support studio for titles like the Warhammer Vermintide series, ceased operations. According to a press release from its parent company, Enad Global 7, the studio failed to secure new work-for-hire contracts at a sustainable rate. Toadman’s closure underscores the difficulties faced by support studios, which often rely on a steady flow of external projects to survive.
FreeJam, the developer behind Robocraft 2, also announced its closure on Jan. 9. In a message shared on the studio’s Discord server, the team expressed regret over their inability to sustain development. The closure not only affects Robocraft 2, which has already been delisted from Steam, but also the original Robocraft and CardLife. “We’re simply unable to launch or sustain development,” the studio wrote.
These closures are part of a larger trend of economic challenges in the gaming industry. In recent years, there have been an increasing number of layoffs and studio closures as developers struggle to adapt to rising production costs and shifting market demands.
