Dontnod, the French studio behind Life Is Strange, Lost Records: Bloom and Rage and Aphelion, has warned that its future is becoming increasingly uncertain without new external funding.
The company’s latest financial statement indicates that continuing operations beyond 31 January 2027 may be difficult unless additional finance is secured. For broader games-industry developments, readers can follow the RETROCADE Arcade Blog.
Revenue falls sharply
Dontnod reported revenue of €6.1 million for the first half of 2026, a 56% decrease compared with the same period in the previous year. That comparison covers the period after Aphelion launched this year against the equivalent period following the release of Lost Records: Bloom and Rage last year, suggesting weaker sales for the newer science-fiction adventure.
Some investment was generated by the Montreal team’s work on an unannounced narrative game based on “a major Netflix intellectual property”. However, that funding was not enough to prevent the substantial year-on-year decline.
Funding and restructuring concerns
Dontnod said its cash and other liquid assets have also decreased. The studio stated that its ability to continue operating depends partly on obtaining external financing for day-to-day business costs and project development. It described this as a material uncertainty over its ability to remain a going concern beyond 31 January 2027.
The company is considering a restructuring that could involve cutting up to 90 positions, although the proposal has not been finalised. Dontnod also plans to concentrate its French teams on a single project, with the aim of making the business more attractive to potential new funding.
Tencent, which invested in Dontnod in 2021 and holds a 41.9% stake, it has chosen not to make any short-term investments to support the studio’s current position.
What happens next?
The combination of falling revenue, reduced liquid assets, possible redundancies and the lack of short-term investment leaves Dontnod in a precarious position. Layoffs appear increasingly likely, while the possibility of the studio closing altogether has not been ruled out.
The outcome will depend on whether Dontnod can secure further funding in the coming months. The situation also highlights the financial risks faced by studios developing large narrative projects, an issue relevant across the wider games business. Readers interested in how dedicated gaming spaces are planned and equipped can explore the Arcade Machine Buying Guide, browse arcade machines, or consider a DIY arcade kit.
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