Don’t Nod Warns It May Not Operate Past January 31, 2027
The studio is considering up to 90 job cuts in France after reporting €8.0 million in cash at the end of July 2026, down from €15.4 million at the end of 2025.
Don’t Nod may not be able to continue operating past January 31, 2027, unless it secures outside financing for its business operations and current projects. The studio behind Life is Strange and Lost Records: Bloom & Rage disclosed the risk in its Sept. 4 business performance update. Its consolidated gross cash fell from €15.4 million at the end of 2025 to €9.8 million at the end of June 2026 and €8.0 million at the end of July.
A shutdown has not been announced. Don’t Nod has identified a serious cash-flow problem that could prevent it from remaining a going concern beyond the start of 2027, and talks are already underway between leadership, employees, and union representatives.
Don’t Nod’s recent releases added to the pressure
Sales of Jusant and Banishers: Ghosts of New Eden fell well below expectations in 2024, leading Don’t Nod to pause development on two other projects. Layoffs followed at Don’t Nod Montreal in 2025 after Lost Records failed to make up the shortfall.
Financial pressure continued through the first half of 2026. Operating revenue fell 56% year over year, while the update also reported a 14% decline in first-half revenue and a drop in operating EBITDA. Don’t Nod recorded a €3.5 million decline in sales during the period, tied mainly to the recognition of PlayStation Plus and Game Pass revenue from Lost Records: Bloom & Rage, early sales of Aphelion, and its back catalog.
Development costs rose by €2.6 million during the same period. Don’t Nod attributed that increase to an unannounced collaboration with Netflix on a narrative game based on a major Netflix intellectual property.
Don’t Nod is considering up to 90 job cuts
The proposed reorganization would focus Don’t Nod’s French operations around a single production line. The company’s board has approved the restructuring project, which is intended to bring the expertise needed to start new projects before current productions are finished while concentrating resources on its priority work.
That plan could reduce the French workforce by up to 90 positions. Don’t Nod has not finalized the cuts, and negotiations with the union and discussions with employees and their representatives are still in progress. Its existing performance plan and cost-cutting measures were not enough to put the business on a sustainable footing as financing became more selective and its financial indicators weakened.
CEO and chairman Oskar Guilbert said the company was responding to a games industry where financing had become more selective and revenue less predictable. He acknowledged that the possible workforce reductions would be difficult for affected employees while describing the plan as necessary for Don’t Nod to continue operating.
External financing could decide the studio’s future
A June warning from the company’s auditors had already raised the possibility that Don’t Nod could run out of funding later in 2026 without new investment. Tencent, which purchased a minority stake in Don’t Nod in 2020 and holds a seat on the company’s board, does not intend to provide additional money in the short term or fund the games currently in development.
The update also cited a 56% year-over-year decline in recorded revenue and said production costs had not been recouped. Revenue from Aphelion and the project known as P14 has not covered the company’s operating expenses.
Don’t Nod described the financial risk in its financial update:
Given the available cash and the cash flow forecast, the company’s ability to continue operations depends partly on securing external financing to cover business operation and project development needs. This represents material uncertainty regarding the company’s ability to continue as a going concern beyond January 31, 2027.
The next few months will determine whether financing arrives in time to keep the studio operating, while the proposed restructuring could alter Don’t Nod’s staff and project pipeline before then.
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