This past June, “Don’t Nod Entertainment, the development studio behind several popular titles such as Life is Strange (2015), Tell Me Why (2020), Banishers: Ghosts of Eden (2024), Lost Records: Bloom and Rage (2025), and Aphelion (2026) released public financial report regarding funding for future projects.” In this report, they shared that Tencent, a major investor, had made the decision to stop funding future projects, leaving the studio in financial crisis. Now, a recent business performance update has gone further in depth on what Don’t Nod plans to do regarding this situation.
For now, Don’t Nod executives believe that the studio will be able to keep functioning the end of January 2027, though they have expressed “material uncertainty” in remaining operable past that date. “Consolidated gross cash at the end of June 2026 amounted to €9.8 million and €8.0 million at the end of July 2026, compared to €15.4 million at the end of 2025.” This means that, even with new projects, “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.” In other words, unless the studio finds another investor, it is highly likely that they will be forced to shut down in some capacity.
To handle this drop in revenue, Don’t Nod has announced an updated business model that primarily impacts their main location in Paris, France. “Against this backdrop, the profound changes in the economic conditions of the video game industry and its financing, combined with the deterioration of DON’T NOD’s key financial indicators, are significantly affecting its competitiveness. The Company therefore believes it is necessary to adapt its business model,” reads the official statement.
This adaptation is a refocusing of French “operations a 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.” Similar to Don’t Nod’s 2024 reorganization where they laid off 69 employees, the new initiative that is “currently under consideration could lead to a workforce adjustment that may involve the reduction of up to 90 positions.” This plan was announced after approval from the Board of Directors, along with a statement from the company’s CEO, Oskar Guilbert:
This first half of the year confirms the major challenges facing our industry. In a market where financing is more selective and revenues are more uncertain, we must adapt our business model with clarity and responsibility. The measures being considered today are difficult; we fully appreciate what they may mean for the employees affected and are ensuring that the necessary support measures are put in place. This plan is, however, essential to ensuring the Company’s continued operations.