Beloved adventure game studio ceases development after betting and losing on Lord of the Rings: Gollum

German developer Daedalic Entertainment is ending internal development to focus exclusively on publishing after the disastrous launch of The Lord of the Rings: Gollum, according to a report from German media.

GamesWirtschaft reports that 25 of Daedalic's roughly 90 employees will be affected by the news. Daedalic says (quoted here through Google Translate) that "we value each and every member of our team and it is important to us that the transition goes as smoothly as possible. Therefore, we will support our former employees in finding new opportunities within our network."

The report also says that Daedalic's other Lord of the Rings game - which received over €2 million in funding from the German government - is ending development.

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Daedalic's main studio is located in Hamburg, Germany. In 2015, it opened a new studio in Dusseldorf, and in 2018, opened an additional studio in Munich. Both satellite studios were shut down in 2021. In 2022, Daedalic was acquired by French publisher Nacon.

Gollum was initially announced in 2019 for launch in 2021, and was delayed numerous times until it finally launched last month. It instantly became the worst-reviewed game of 2023, prompting an apology from the studio and a promise of improvement patches, which remain in development.

Prior to Gollum, Daedalic had primarily been known as a developer of point-and-click adventure games in the vein of classics like Monkey Island. The Deponia series was a particular standout, running for years to satisfy the underserved fans of an often-dormant genre. The survival and crafting-themed spin-off, Surviving Deponia, remains in development at external studio AtomicTorch.

Daedalic has been growing its brand as an indie publishing label for years, and it seems that will be the core of its business from here on. The company has published well-regarded indies like Shadow Tactics: Blades of the Shogun, Barotrauma, Inkulinati, and many more. Daedalic tells GamesWirtschaft that it has "eight promising releases" set to launch this fiscal year.

Game devs around the industry sympathized with Gollum's poor reviews at launch.