The video game industry’s ongoing crisis is claiming its next notable victim. French development studio and publisher DON’T NOD, known for hits like Life is Strange, Vampire, and Outcast, is about to experience another wave of layoffs. In an official press release, company management announced the launch of a so-called transformation program. The studio cited a severe deterioration in economic conditions in the gaming industry and a reduction in financing options as reasons for the major move. Although the announcement avoided the word layoffs, the upcoming negotiations with employee representatives on the employment protection plan are enough to illustrate the seriousness of the situation.
Signs of financial turmoil for Paris developers have increased in recent months. The current austerity measures were largely triggered by the disappointing commercial performance of “Aphelion,” a space action-adventure film set for release in April 2026. The game apparently fell short of internal sales expectations, leading the studio to admit in June that liquidity was becoming increasingly scarce. As a result, internal resources for planned follow-up projects such as the ominous P14 project were significantly reduced.
The announced cut didn’t catch the studio off guard, but it’s part of a series of concerning cuts. Last year, DON’T NOD had to lay off employees at its Canadian branch in Montreal. Through convening employee representatives and ongoing discussions with relevant unions, management is currently preparing for planned job cuts at European locations. The final size of the layoffs and the company’s future direction should be determined soon.
Management plans to hold an important board meeting on Thursday, September 3, 2026. Immediately after the meeting and after the stock market closes, the company hopes to provide the public and financial markets with the specific details and next steps of the transformation plan.
Despite the precarious situation, DON’T NOD continues to try to stabilize its balance sheet through commissioned work – among other things, the team is currently working on video game adaptations of well-known Netflix brands. Whether these projects will be enough to keep the studio on track in the long term remains to be seen.
