Don't Nod warns investors: the studio may not continue operating after 31 January 2027, with 90 jobs being cut in France

French studio Don't Nod, known for Life is Strange and Lost Records: Bloom & Rage, has told investors it may cut 90 employees in France. The company acknowledges that it may not be able to continue operating after 31 January 2027.

In the first half of the current financial year, Don't Nod's operating revenue fell 56% year on year and stopped covering its current operating costs. The operating EBITDA loss for the first half of 2026 came to €4.3 million.

French production is being merged into a single line

The reorganisation was approved by the board of directors, and the studio's management has begun talks with union representatives. French operations are being merged into a single production line that will bring together the skills needed to launch new projects before current ones are finished. In the company's wording, this should sustain a continuous pipeline of projects and long-term growth, and will also make it possible to allocate resources more efficiently and to focus on priority projects.

The company has not disclosed exactly who will be affected by the cut of 90 positions or how roles will be distributed within the new structure. So far it has made no public comment beyond its address to investors.

What brought the studio to this point

Don't Nod's money troubles have been under discussion for months. Earlier this year the company explained that it was looking for ways to extend its cash runway after its former investor Tencent decided not to put additional money into the business. The refusal of a major shareholder to invest further left the studio alone with its own revenue, which fell 56% over the half-year.

The company itself blames “systemic pressure in the video game industry, characterised by extremely selective funding”, and speaks of the need to adapt to “new market conditions” in order to restore its competitiveness. Behind that wording lies a straightforward mechanic: money for development has not disappeared as such, but it is now spread across fewer projects and on tougher terms.

Why this hits auteur narrative studios in particular

Don't Nod is one of Europe's most recognisable developers of auteur story-driven games, and its position looks like a symptom of a broader process. Narrative adventures are expensive to produce and hard to monetise after release: they have neither a service model nor a long tail of in-game sales, and sales are concentrated in the first few weeks. As long as publishers and funds were willing to finance mid-budget premium projects, that model worked. Amid a funding squeeze it is precisely this model that turns out to be the least protected.

Tellingly, the studio has staked its bet on rebuilding production: the shift to an end-to-end line looks like an attempt to remove the downtime between projects, when a team has already been freed up but the budget for the next title has not yet been confirmed. Other mid-sized independent developers will probably apply similar logic in the near future: fewer parallel productions, a more compact core team, more contractors at peak stages.

For the job market in French game development this is a bad signal: 90 positions at a prominent local independent developer will be looking for a new home all at once. If the trend of selective funding persists, these specialists' chances of finding a place on a comparable auteur project will be lower than at outsourcing studios and service teams.

The immediate fork in the road for Don't Nod itself, judging by its own warning to investors, is to find funding or otherwise change its cost structure before 31 January 2027.

Community reaction

On X the news was met with weary sadness rather than an explosion of anger. Under posts from games outlets people are sympathising with Don't Nod's employees and recalling the studio's strong releases, but almost no one looks surprised: the drop in revenue, the failure of Aphelion, Tencent's refusal to put in new money and the warning about a possible shutdown after 31 January 2027 are being read as an expected outcome. The French union STJV is sharply criticising CEO Oskar Guilbert over the plan to cut up to 90 people — around two thirds of the French headcount. The arguments are about the management's share of the blame. Some see a scandal in the fact that investors walked away the moment it stopped being profitable, even though many still praise the quality of the studio's games. Others reply that Don't Nod expanded its headcount and its number of projects too quickly, and that buyers simply did not pick up its latest games. There are also caustic remarks along the lines of “they brought it on themselves”. Industry professionals read it as yet another blow to French game production: the Paris studio is all but winding down, while the Canadian office is holding on for now thanks to a contract with Netflix.

“A heavy blow to the French games scene. There were missteps, but what I remember first are the very strong releases of recent years.”

— @KhromTweets (X)

“Well, of course: when the money-hungry people who invested in the company pull out of it… A scandal, given the calibre of this studio.”

— @RaphJV (X)

“Such a shame, a great studio. But buyers decide for themselves what they want to play.”

— @le_fumier (X)

What brought Don't Nod to this position: the bet on narrative games, miscalculations in release planning, a decline in interest in the genre?