The studio behind the original Life Is Strange, Dontnod, has said it may not survive beyond January 2027 without additional funding. In a recent financial statement, the company acknowledged that its revenue has dropped by half year-on-year, and it is now weighing the loss of up to 90 positions.
The company, which also made Lost Records: Bloom and Rage and the new sci-fi adventure Aphelion, said its ability to keep operating “depends partly on securing external financing to cover business operation and project development needs.” It called the situation “material uncertainty regarding the company’s ability to continue as a going concern beyond January 31, 2027.”
The Revenue Drop
In the first half of 2026, Dontnod took in just €6.1 million. This marks a 56-percent drop from the same period the year before, which means the studio’s income has dropped by more than half when measured against the prior year’s figure.
Last year saw the launch of Lost Records: Bloom and Rage, with Aphelion following this year. The financial statement shows that sales for the newer title came in lower across the comparable periods.
The decline has eaten into the studio’s cash reserves. Dontnod said its liquid assets in cash and other transferable assets have similarly fallen, which is what triggered the warning about its long-term viability. With revenue at €6.1 million for the half-year and reserves shrinking, the studio’s financial cushion is thinning at the same time it is searching for new backers.
The Netflix Project
The Montreal studio has found a way to bring in fresh funds for Dontnod. It is developing an unannounced narrative title based on “a major Netflix intellectual property.”.
The extra funding from that project did little to counteract the wider economic decline. Even with the Netflix deal, the company’s financial standing remains weak.
No Netflix property has been named as the basis for the game, nor has any announcement date been given. At present, the project stands as the single bright spot in an otherwise difficult financial picture, even though the investment it drew was not enough to close the gap left by falling sales.
Job Cuts on the Table
Dontnod has stated that it is now compelled to contemplate a shift in its course that “may involve the reduction of up to 90 positions.”.
The company has not settled on a final figure for job losses. Instead, it has flagged the cuts as a possibility rather than a done deal. A maximum of 90 positions may be affected, though the ultimate size of any reduction still hangs in the balance.
At the same time, Dontnod is planning to shift its French teams toward a single project instead of splitting their efforts across multiple ventures. The thinking behind this move is that focusing all available resources on one game could help the studio raise fresh funds.
Tencent Stays Out
Dontnod received funding from Tencent back in 2021, which now holds a 41.9-percent share in the studio. The Chinese firm has decided against making any short-term investments to support the company during its present difficulties.
Without Tencent stepping in, Dontnod has no large backer to rely on. The studio’s longstanding partnership with the Chinese firm — which became a shareholder in 2021, holding a 41.9-percent stake — has failed to produce emergency funding.
It remains unclear whether Tencent will change its stance over the next few months.
A Long-Standing Studio
The studio Dontnod built its name on narrative adventure with the original Life Is Strange, which remains its most well-known work.
Other titles came from the company over the years, including Lost Records: Bloom and Rage, which was released last year, and Aphelion, which followed this year. The sales from these two most recent releases are what now form the core of the studio’s financial problems.
“This represents material uncertainty regarding the company’s ability to continue as a going concern beyond January 31, 2027.”
The Going Concern Warning
The financial statement from Dontnod makes clear statements about what it expects to come next. The firm said its “ability to continue operations depends partly on securing external financing to cover business operation and project development needs.”
The wording makes all the difference. A “going concern” warning is a formal signal that a company has concerns about its ability to continue operations. In Dontnod’s case, the statement attaches a specific date to those concerns: January 31, 2027.
What Happens Next
The studio has stated it is looking for outside funding to meet its operational and project development costs. Whether Dontnod can keep operating beyond January 31, 2027, depends on how that search turns out.
Outright closure has not been ruled out by the company. The layoffs loom, and the prospect of the studio being shut down altogether remains a possibility.
Dontnod remains active at present. The company’s French studios are being directed toward one project, while its Montreal staff works on the Netflix game.
Whether Dontnod can secure the money it says it needs will become clear in the coming months. The studio’s survival depends on external backers, and the company has admitted that without them, its capacity to keep running faces serious uncertainty.
Whether Dontnod can secure that funding remains to be seen.
Source: kotaku.com
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