Don’t Nod, best known as the developers of Life is Strange 1 and 2, has been having a rough go of it, lately. In 2024, its games Jusant and Banishers: Ghosts of New Eden sold “well below expectations”, causing it to pause development of two further games. Then, in 2025, it laid off several employees after Lost Records didn’t quite make up the difference.
Based on this financial update (thanks, GamesIndustry.biz), its third-person adventure game Aphelion didn’t pull things back from the brink, either. The developer reported a 56% decrease in operating revenue year-on-year, “amid systemic pressures in the video game industry, characterized by highly selective financing.”
This also presented as a €3.5 million decline in sales in the first half of 2026, “driven primarily by sales and the recognition of a portion of PS+ and Game Pass revenue from Bloom and Rage, initial sales of Aphelion, and the back catalog”, as well as an increase development costs to the tune of €2.6 million because of an as-yet-unannounced collaboration with Netflix for “a narrative game based on a major Netflix intellectual property.”
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This is a dire forecast, as it means there’s a “material uncertainty regarding the company’s ability to continue as a going concern beyond January 31, 2027.” In other words, Don’t Nod is running out of money, and fast.
As a result, the studio’s looking to reduce the amount of plates it’s currently spinning: “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.”
To do this, it’ll be undergoing a hefty restructure that may well lead to layoffs. Or, in corporate speak, a “workforce adjustment in France that may involve the reduction of up to 90 positions.” The project to do so has already been approved by its board of directors, and negotiations are in place with its union.
Like a crack of thunder in a distant stormcloud, this is yet another grim piece of news after an already-severe year for the industry—one spearheaded in 2026 by Microsoft, which has laid off 1,600 workers and is soon to lay off 1,600 more. It is, as lead services programmer Chris Hayes at id Software put it, a sign that “there’s something wrong.”
