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The Lord of the Rings: Gollum studio Daedalic reportedly lays off 25 employees, exiting game development

Second Lord of the Rings game also canned.

Daedalic Entertainment, the company behind this year's critically lambasted The Lord of the Rings: Gollum, is reportedly set to exit game development and has laid off around 25 employees as part of the move. Additionally, a second Lord of the Rings game in development at the studio is said to have been cancelled.

Daedalic's The Lord of the Rings: Gollum, which was announced in 2019 for release in 2021, finally arrived last month, following numerous setbacks and delays. Its reception was less-than-positive, however, with Eurogamer's Christian Donlan calling it a "well-intentioned mess" in his 1 out of 5 review. It was something of a surprise, then, when reports surfaced soon after that Daedalic was currently working on a second Lord of the Rings game.

According to German website Games Wirtschaft, however, that game - which has reportedly been in the works since mid-2022 - is no more, with development now cancelled as part of Daedalic's sudden decision to shift away from development and solely into publishing following Gollum's poor reception.

The Lord of the Rings: Gollum was not well-recieved when it finally arrived in May.Watch on YouTube

In a statement provided to the website (as per Google translate, but I've reached out to Daedalic for confirmation of the news and an official translation), Daedalic said 25 employees out of a team of more than 90 would lose their jobs as a result of the company's shift in focus.

"We value each and every member of our team and it is important to us that the transition goes as smoothly as possible," a company spokesperson said. "Therefore, we will support our former employees in finding new opportunities within our network."

Games Wirtschaft notes Surviving Deponia, a new entry in Daedalic's Deponia series being developed by external studio AtomicTorch, will be unaffected by today's news.

Daedelic, which is best known for the string of point-and-click adventures it has released since its founding in 2007, has struggled to find success in recent years. Its adaptation of Ken Follet's The Pillars of the Earth and strategy game A Year of Rain failed to find much of an audience, and the company closed its Düsseldorf and Munich studios in 2021.

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