Last year was one of the toughest in the video game industry, with the shuttering of over 20 studios, including those that were part of our childhood memories. While the number of video game studio closures was cut by more than half this year, every closure hurts because of the domino effect it creates, which includes job losses. Here are 10 video game studios that shut down in 2025, including those that got back up like a cat with 9 lives.
#1. Ballistic Moon (Until Dawn)
One of the first high-profile studios to permanently close its doors this year was Ballistic Moon. The sad news spread in March and was blamed on Sony’s rejection of their funding pitch. However, it was a long time coming. After the September 2024 layoffs, it was widely claimed that only around 40 people were left in the video game studio. Until Dawn Remake launched to a mixed reception, with a Metascore of 72 on PC and 70 on PS5. In an era where studios either create commercially successful games or perish, that effectively nailed the video game studio’s coffin.
#2. Cliffhanger Games (Black Panther Title)
The closure of Cliffhanger Games in May 2025 came like a shock, especially because the video game studio was actively hiring as it continued to work on a Black Panther game, which was also canceled. According to reports, the real reason why EA axed the studio was that the Black Panther title it was working on had not left the pre-production phase after spending four years in development. The number of people affected by the decision remained unknown. EA promised to reassign some of those impacted to other roles.
#3. Hypixel Studios (Hytale)
Fast-forward to June 2025, and Riot Games was in the news for shutting down Hypixel Studios. The studio was working on its debut game called Hytale. The game was advertised as being a direct competitor to Minecraft. According to the video game studio’s co-founder, they tried everything they could to avoid the outcome, including adjusting timelines, reducing scope, and finding new angles. However, the longer the game spent in development, the more the bar kept rising, and gamers’ tastes kept changing. Hypixel Studios was founded in 2018 but never shipped a single game before its closure. Close to a hundred people were impacted by the closure.
#4. Secret 6 Madrid (Suicide Squad: Kill The Justice League)
Secret 6 is a support studio and has a long list of game portfolios they have worked on—although not all of them have been successful. Back in July 2025, the studio’s lead game producer Patricia Pérez Menéndez announced that the studio was facing closure risk unless something changed before the end of the month. Sadly, nothing changed, and the Madrid studio was eventually shuttered with around 42 people impacted. Menéndez alleged at that time that the decision was solely made by the corporate group that acquired Secret 6 in 2022.
#5. Testronic Madrid and Belgrade Studios
The video game language solutions integrator (LSI) announced in September that it was closing its Madrid and Belgrade studios. The decision was part of a company-wide restructuring initiated by the new CEO, Sharon Baylay-Bell. The decision to close the European studios was made for economic reasons. Following the closure, the company announced that it was expanding in Southeast Asia, particularly in Manila. It hired over 160 people in its Manila studio and doubled the number of testers. The number of people impacted by the decision remains unknown.
#6. Avalanche Studio Group (Just Cause)
In September, Avalanche Studios Group announced changes to its staffing and location that led to the closure of its Liverpool studio. Also, the company’s studios in Malmö and Stockholm experienced significant layoffs. It was widely believed that the decision was the aftermath of Contraband’s cancellation. After the closure and layoff announcement, the studio’s co-founder Christofer Sundberg said the studio was never created to be safe and should not try to polish the edges of what already exists, adding that “Creativity is supposed to be dangerous, uncomfortable, exciting”.
#7. Boss Fight (Squid Game: Unleashed)
Boss Fight is a Netflix game studio and the creator of Squid Game: Unleashed, which hit number 1 in 26 countries. In October 2025, Netflix shut down the studio. Boss Fight was founded in 2013 and has created lots of iconic titles, including Age of Empires and Rise of Nations. Netflix acquired the studio in 2022. The video game studio was working on an undisclosed title before its shuttering. Last October, Netflix closed Team Blue, a triple-A development studio. Hopefully, Netflix video game studio closures won’t become an annual October event.
#8. T-Minus Zero Entertainment
T-Minus Zero Entertainment was shut down in August 2025. The announcement was made public on the last day of the month and was also blamed on the pulling of funding by NetEase. Due to the market conditions, the video game studio struggled unsuccessfully to secure new funding. However, unlike other studios that were not so fortunate, a blog post on the company’s website confirmed on October 31 that they were returning. A small group of veteran directors and founders acquired the name to keep the team spirit alive. They also initiated a refined development model and funding approach inspired by the independent film world.
#9. Fantastic Pixel Castle
NetEase struck again in November 2025, leading to the closure of several studios. Trouble started when NetEase pulled funding from several studios it previously backed as the company scaled back on its overseas operations. Several studios affected by NetEase’s funding cuts struggled to find new funding partners to no avail. At the time of the video game studio’s closure, they already had a playable demo, which they used to try and find a new funding partner. November 17, 2025, was the last day of the studio’s operation. In the studio’s farewell post, they shared an hour-long video showcasing some missions.
#10. Bad Brain Game Studios (Midnight Riders)
Bad Brain Game Studios was another studio impacted by NetEase’s funding cut in November 2025. Before its closure, the video game studio was working on Midnight Riders, an open-world, story-driven action-adventure inspired by blockbuster cinema and paranormal thriller novels of the 1980s. November 17, 2025, was also the studio’s last day of operation. As they continued to look for funding, they released a sizzle reel that showcased how far they had come in the game’s development. Bad Brain Game Studios was the 9th NetEase-owned or backed studio to permanently shut its doors in 2025.
Video game studios’ closure outlook for 2026
There are already predictions of more video game studio closures for 2026, suggesting that the industry is not out of the woods yet. For example, following the $55 billion acquisition of Electronic Arts by a consortium comprising Saudi Arabia’s Public Investment Fund, Silver Lake, and Affinity Partners, analysts are predicting the new owners will close or sell some studios to beat EA’s $20 billion debt. BioWare is one of the studios whose future is in serious doubt.
On the other hand, NetEase is going through a hard reset that has seen close to a dozen studios shuttered, a reorganization that is expected to continue in 2026. The situation is further complicated by the increased funding cuts across the industry. However, the number of studios that will likely permanently shut their doors next year will be fewer than what we experienced this year.
Which of the video game studios that shut down in 2025 will you miss the most? Share your thoughts with us in the comment box below.
