Avalanche Studios Rocked by Closures and Layoffs Amid Intensifying Industry Headwinds

The gaming world is reeling from a significant development as Avalanche Studios, the acclaimed developer behind the explosive Just Cause series and the wilderness hunting game TheHunter: Call of the Wild, announced the closure of its Liverpool studio and substantial layoffs across its Malmö and Stockholm locations in Sweden.

This somber news comes just two months after the company made the difficult decision to halt development on an unannounced project, signaling deeper structural adjustments within the veteran studio.

The Liverpool studio, a branch with a relatively short history under the Avalanche banner, is set to cease operations entirely.

Approximately 50 dedicated individuals are reported to be impacted by this closure, marking a painful end to their work on whatever promising endeavors were underway. Concurrently, staff reductions are also being implemented at Avalanche’s long-standing Swedish studios in Malmö and Stockholm, although the exact number of employees affected in these locations has not been publicly disclosed, with sources simply stating "some" will be let go.

A spokesperson for Avalanche Studios Group attributed these drastic measures to what they described as "unprecedented challenges" within the broader gaming industry.

Their statement highlighted a trifecta of pressures: "rising development costs, a more challenging economic landscape, and a highly competitive market." These factors are creating a perfect storm, forcing even established and successful studios like Avalanche to make difficult and often heartbreaking decisions to ensure long-term viability.

The Liverpool studio's journey is a tale of evolution within the industry.

It was formed from the remnants of Studio Gobo, a company acquired by Avalanche in 2020 to bolster its Expansive Worlds division. While Expansive Worlds, responsible for the popular TheHunter franchise, will continue its operations, the decision to shutter the Liverpool branch underscores the strategic recalibrations Avalanche is undergoing.

The brief but impactful life of the Liverpool studio ends amidst these larger industry shifts.

This restructuring is a stark reminder of the volatile nature of game development, where even a storied studio with multiple successful franchises is not immune to economic headwinds. The news sends a ripple of concern throughout the industry, emphasizing the ongoing struggles many developers face in an increasingly saturated and financially demanding market.

While Avalanche Studios Group will continue to operate its core studios and projects, the closure in Liverpool and the layoffs in Sweden represent a significant contraction, leaving many to wonder about the future landscape of independent and AAA game development.