With the popularity of games such as Stardew Valley and Animal Crossing, the overwhelming support for PuffPals: Island Skies’ Kickstarter campaign came as no surprise. The cozy life simulator successfully raised $2,564,821 despite an initial funding goal of only $75,000. Three years have passed since the over $2.5 million was raised, and the final product plus its associated websites are nowhere to be found. Many backers are now requesting refunds as the game’s owner is on the receiving end of several lawsuits.

The Kickstarter campaign for PuffPals: Island Skies was launched on April 6th, 2022. The campaign lasted for a total of 30 days, ending on May 6th of the same year. In that month-long time frame, the campaign was able to reach its largest stretch goal of $2 million with the generous donations of 42,016 backers. Based on the funding goals, fans expected a finished product with several unique biomes, shops, and minigames. The game was supposed to be released in January 2023 with playability on PC, Mobile, and the Nintendo Switch. 

PuffPals: Island Skies was being developed and managed by Fluffnest. Surprisingly, Fluffnest was originally a plush toy company rather than a gaming studio. Fluffnest used the goodwill from their toy business, Fluffnest Plushies, in the promotion of PuffPal: Island Skies, as shown by various Kickstarter-exclusive plushies backers could receive. 

The beginning of the end for the cozy game came when Fluffnest Plushies unexpectedly went out of business. In a post on the plushies subreddit, one fan details how the Fluffnest plushie website and emails were suddenly out of commission, in addition to all employees being fired and plushie production being halted. It became clear that those who placed orders were no longer going to receive their toys, and many fans worried that the failure of Fluffnest Plushies spelled trouble for PuffPal: Island Skies.

Fluffnest assured fans that, despite the closure of Fluffnest Plushies, “Island Skies production is secured and will not be affected.” However, the game’s production quickly began to deteriorate. In the game’s second February 2025 update, Fluffnest announced that “Island Skies is migrating from Unity’s game engine to Unreal Engine” and provided little explanation for why or how the development team would manage such a massive change. Many backers were suspicious of the sudden engine switch, which only compounded previous concerns surrounding the lack of an Alpha 2 build after three years of production. 

The game’s most recent update, which was in May 2025, solidified backer distrust with the project. The update details Fluffnest’s alleged legal and financial troubles with another company named Room8, who was supposedly in charge of various aspects of game development. Fluffnest blamed Room8 for a lack of meaningful development progress, claiming “we don’t currently trust Room8 to deliver a version of Island Skies that meets our standards.” 

Fluffnest claimed they “remain fully committed to delivering the game we promised,” but the removal of the PuffPals: Island Skies website suggests an indefinite pause in game development. The lack of tangible updates on Kickstarter and the removal of the game’s website has left backers demanding refunds, which range anywhere from $20 to $6,500. Whether or not these backers will be re-imbursed remains unclear. 

In addition to the wave of backer refund requests, Fluffnest is also involved in multiple lawsuits related to the development of PuffPals: Island Skies. One lawsuit comes from a former Fluffnest concept artist named David Ryono, who posted on reddit about Fluffnest refusing to compensate him for his work on PuffPal: Island Skies. He is currently suing Fluffnest to obtain the $11,400 Fluffnest owes him for his work. The amount of money Ryono is owed is incomparable to the money Room8 is demanding in their own lawsuit against Fluffnest, in which Room8 accuses Fluffnest of contractual fraud during their collaboration on PuffPals: Island Skies. Room8 is demanding $1.9 million in compensation.

The state of these lawsuits and backer refunds remain unclear, with the situation’s only certainty being that PuffPals: Island Skies is not releasing any time soon. If you are interested in a more in depth summarization of the situation, please refer to Mujin’s YouTube video on the subject.