The Lord of the Rings: Gollum studio Daedalic reportedly lays off 25 employees, exiting game development

Daedalic Entertainment, the company behind this year’s critically lambasted The Lord of the Rings: Gollum, is reportedly set to exit game development and has laid off around 25 employees as part of the move. Additionally, a second Lord of the Rings game in development at the studio is said to have been cancelled.

Daedalic’s The Lord of the Rings: Gollum, which was announced in 2019 for release in 2021, finally arrived last month, following numerous setbacks and delays. Its reception was less-than-positive, however, with Eurogamer’s Christian Donlan calling it a “well-intentioned mess” in his 1 out of 5 review. It was something of a surprise, then, when reports surfaced soon after that Daedalic was currently working on a second Lord of the Rings game.

According to German website Games Wirtschaft, however, that game – which has reportedly been in the works since mid-2022 – is no more, with development now cancelled as part of Daedalic’s sudden decision to shift away from development and solely into publishing following Gollum’s poor reception.

In a statement provided to the website (as per Google translate, but I’ve reached out to Daedalic for confirmation of the news and an official translation), Daedalic said 25 employees out of a team of more than 90 would lose their jobs as a result of the company’s shift in focus.