The Industry Checkpoint - Issue #5

Highlights of the Week

• Romero Games has confirmed that it hasn’t shuttered completely and is in talks with new publishers after funding for an unannounced project was pulled overnight. Romero Games has not directly confirmed if Microsoft was the publisher responsible. Game Developer

• ByteDance is reportedly developing a new version of its TikTok app to launch in September, prior to the deadline on Trumps third extension for ByteDance to find a buyer for TikTok. The current app will stop working in March 2026 for the US and users will be forced to migrate to the new version of the app. ComicBook Gaming

Studio News

• Splitgate 2’s Community Manager, Brodrian (Reddit), confirms to fans that the Splitgate 2 team is not giving up on the title and are focused on addressing as many issues as possible. ComicBook Gaming

• AI-Native gaming studio Incite Interactive has put development of Auravale on hold. The company posted an update for the project on social media this week. LinkedIn

Spotlight: Layoff Updates

Last week there were a number of studios who had layoff or shutdown events that were missed due to the holiday weekend. This section includes those, as well as studios who did not have a public announcement for their event. Non-public announced events will be referenced to LinkedIn but will not include a hyperlink to preserve privacy for individuals.

• A number of employees were laid off at Stoic Studios last week, as a part of the layoff activity from Microsoft. Gameranx

• Testronic is shutting down outsourcing studio Secret 6 Madrid. The closure, which finalizes on July 31, will affect 42 employees. LinkedIn, Game Developer

• Off the Grid developer Gunzilla Games has gone through its second set of layoffs in the last three months, as the company goes through a restructuring process. The number of employees affected is not known at this time. Game Reactor

• Ubisoft has laid off 19 employees at Red Storm Entertainment as a part of Ubisoft’s “targeted restructuring and global cost-saving efforts”. GamesIndustry.biz

• Cult of the North is being shut down due to lack of funding. The studio was founded in 2022 and were working on a free-to-play strategy war game called We Will Be Gods. LinkedIn

• An internal game development team at Discord was sunset, with layoffs initiated for much of that team. LinkedIn

• Parallel Studios has undergone a layoff, affecting an unknown number of developers. The studio was working on Ethereum NFT card game Parallel and an AI-powered survival simulation game called Colony. LinkedIn

• An undisclosed number of employees were laid off in a Hasbro/Wizards of the Cost reduction event earlier this week. LinkedIn

Business News

• EU industry body Video Games Europe steps forward to provide its opinion on Stop Killing Games, the consumer-driven initiative that demands games publishers leave their titles in a playable state once support is terminated. The industry body insists that the initiative’s proposals would make games “prohibitively expensive to create”. Eurogamer

• Epic Games has agreed to settle its antitrust litigation with Samsung over its Galaxy store policies and agreements with Google. According to Epic Games CEO, Tim Sweeney, Samsung is attempting to address Epic’s concerns regarding blocking rival app marketplaces through default settings on mobile devices. GamesBeat

• Former VP of D&D and creative director for Magic: The Gathering, Jess Lanzillo, has joined White Wolf as creative director for World of Darkness. Lanzillo will be responsible for IP development for tabletop RPGs. Polygon Gaming

• Nvidia has become the first company to ever hit a $4 trillion market cap. In May the company reported a 70% increase in quarterly revenues, in large part due to demand for its AI chips. PC Gamer

Startups and Shutdowns

• Former Uncharted and The Last of Us game designer, Vinit Agarwal, has announced that he is starting his own studio in Japan. Agarwal was recently director of Naughty Dog’s cancelled standalone online multiplayer game for The Last of Us. Eurogamer

• Side is opening a new studio in Riyadh, Saudi Arabia, in partnership with the country’s state-backed Public Investment Fund (PIF). The studio will open by Q4 2025 and will focus on providing co-dev services to MENA developers. Game Developer

Investments and Partnerships

• Square Enix has led an undisclosed investment round into Vaultbreakers developer BetaDwarf. Square Enix will become a minority stakeholder in BetaDwarf as a result of the deal. Game Developer

• Ninty Media has launched a Kickstarter campaign for a new venture called “Ninsight”. Ninsight aims to provide Nintendo themed news, reviews, and talking points in a premium magazine with zero advertisements. Nintendo Life

• Circle Games has secured $7.25M in its latest funding round. The round was led by Bitkraft Ventures with a16z Speedrun, Play Ventures, e2vc, and APY supporting. The funding will be used to increase headcount and scale their first title in the casual puzzle market. GamesIndustry.biz

• Million Victories secured nearly $40M in a funding round led by Haveli Investments. The investment will be used to expand its operations and user acquisition efforts globally for its title Million Lords. GamesIndustry.biz

• Fluidstack, a cloud startup company based in London, has managed to borrow $10B in loan from multiple financers by putting its Nvidia H100 AI GPUs up as collateral against the loan. PC Gamer

• Abacus has raised $6.6M to build agentic CPA assistants for modern accounting firms. Its intelligent assistants learn firm-specific workflows and take on rote tasks that can slow teams down. GamesBeat

• Genies, an AI avatar and gaming tech company, has partnered with Unity to introduce AI avatar tools to the engine in 2026. GamesBeat

Spotlight: Artificial Indiscretion

• Less than 24 hours after X’s AI-powered chatbot Grok called itself "‘MechaHitler” and posted antisemitic messages and graphic descriptions of sexual assault, CEO Linda Yaccarino resigned from the social media platform. It is not known if the surprise resignation was related to the chatbot’s activity. PC Gamer

• McDonalds’ AI hiring platform, McHire.com, allowed admin access to 64 million candidate chats with the username and password ‘123456’. Two security researchers revealed the security flaws last week and the vulnerability has been fixed on the platform (presumably no data has been hacked or leaked). PC Gamer

• Stanford University researchers have found that AI chatbots and AI powered therapy programs (7 cups’ “Noni”, Character.ai’s “Therapist”) fuel delusions and give dangerous advice. In controlled scenario testing, commercial therapy chatbots performed worse than the base AI models in many categories. These platforms are serving millions of users despite having no regulatory oversight equivalent to the licensing requirements for human therapists. Ars Technica

Market Insights

• Sloclap reveals that the much of the core audience for their soccer game Rematch, as well as a large portion of the development team, are not fans of the real-world sport. CEO Pierre Tarno credits the dynamics and team play of the game interesting to players who do not engage in soccer games. Eurogamer

• Regardless of the review bomb campaign on Ready or Not (due to censorship changes made to pass certification across console platforms), player count for the title has doubled and the game is now at the top charts of PlayStation’s preorder list. PC Gamer

• Publisher CI Games and developer Hexworks have announced that medieval action-RPG Lords of the Fallen has surpassed 5.5 million players. Note, this is not units sold, as Lords of the Fallen has a Free Friends pass where a friend can join the base game owner’s adventuring with progress and loot stored in the host’s online session. VGChartz

• Circana’s Mat Piscatella shared on social media this week that US video game subscription spending has reached an all-time monthly high in May 2025, marking its 3rd consecutive month of growth. Piscatella credits the spending change to pressures of higher prices in other spending categories (food) and general economic uncertainty is encouraging spenders to look for value. ComicBook Gaming

• Drake Star Partners has released their Q2 Global Gaming report. Gaming stocks have recovered during the second quarter of 2025 and M&A activity has risen, but game investments are continuing to lag. Notable deals in M&A included Krafton’s acquisition of ADK, Epic Games’ acquisition of Loci, and Apple’s purchase of RAC7. Investment deals dropped to 110 in Q2, vs the 150 deals in Q1. GamesBeat

Tech Innovations

• HP has announced it is implementing a “CarFax” inspired data collector to log lifetime use and health of PCs. The data will enable more confidence around secondhand PC sales. PC Gamer

• Tainted Studios has unveiled its first game, V.O.I.D., a team-based horde survival game with a Web3 game distribution strategy. Buying the game will give players a token to act as a license to play and enables the player to trade the game when they are done with it. GamesBeat

• Playnance has officially launched its first fully on-chain social gaming platform, called PlayW3. The platform offers an all-in-one social gaming hub that includes a one-click social login system, a scalable gasless blockchain infrastructure, and an integrated fiat onramp simplifying the purchase of crypto currency. Pocket Gamer

• A surgical robot in a study at Johns Hopskins has completed a milestone for both soft and hard skillsets by successfully operating on a pig’s gallbladder by responding to vocal directions. Unlike prior iterations of autonomous surgical robots, this robot used imitation learning (watching video tutorials) to help it perform the procedure with 100% accuracy. PC Gamer

• AI startup Artificial Agency has announced the alpha launch of its AI-powered behavior engine. The technology is now available to select studios as part of the company’s pilot program. The first iteration includes fully autonomous characters that express emotion and react dynamically to complex scenarios and game directors that can observe the player’s progress and manage the overall story. GamesBeat

Government in Games

• Valve has blocked a mod for action RPG Mount and Blade: Warband in South Korea. The mod converted the game’s medieval setting to a “modern depiction of Korea’s Gwangju Democratization Movement” that took place in 1980. South Korea’s Game Rating and Administration Committee (GRAC) notified Valve that the mod was in violation of its laws. GamesIndustry.biz

• Apple is appealing the EU’s $568.6M fine. The EU deemed Apple in violation of EU law by not permitting App Store apps to link or make reference to alternative means of payment that could circumvent Apple’s own storefront. GamesIndustry.biz

• The UK Video Games Council has announced its members and includes reps from Larian Studios, Microsoft, UKIE, and TIGA. Twice a year the council will meet to provide “strategic advice” for the UK games industry. PC Gamer

• The FBI has seized NSW2U, a major Switch piracy site, along with a few similar sites (NSWDL, Game-2u). NSW2U was already a part of EU’s piracy watchlists as of earlier this year. Video Games Chronicle

See you next week industry watchers,

Pushing Buttons