Kwalee has shuttered its internal development team, Kwalee Labs, following the disappointing commercial performance of its debut title, Luna Abyss. The closure resulted in nine layoffs, according to a LinkedIn post by the studio’s team members. While the publisher will continue to release third-party projects, it has halted all internal game development for the foreseeable future.
Why did Kwalee Labs close?
The closure of Kwalee Labs stems from the poor sales performance of Luna Abyss, a sci-fi horror FPS released on May 17. Despite a favorable critical reception—boasting an 81% average score on OpenCritic—the game failed to find a sustainable audience. According to SteamDB, the title reached a peak of only 317 concurrent players on PC. Recent data shows that daily peak activity has dropped to as low as 43 players, indicating a lack of long-term player retention.
Did you know? Luna Abyss launched on Xbox Game Pass at release, a strategy often used to boost visibility for niche titles, yet it failed to generate the sustained player counts required to sustain internal studio operations.
How do critical reviews compare to commercial success?
There is a stark disconnect between the quality of the game as perceived by critics and its actual market performance. While the title holds an 86% positive rating on Steam, this high level of user satisfaction did not translate into the sales volume necessary to justify the studio’s continued operation. Historically, this trend highlights the "discoverability crisis" in the current gaming market, where even highly-rated independent titles struggle to compete for player attention against larger, established franchises.
What is the future of the Kwalee brand?
Kwalee is shifting its business model to focus exclusively on external publishing rather than internal production. By distancing itself from the high costs and risks associated with maintaining an in-house development team, the company aims to mitigate financial exposure. This move reflects a broader industry trend where publishers are streamlining operations by prioritizing external partnerships over the overhead costs of managing internal studios.
Frequently Asked Questions
Was the entire Kwalee company shut down?
No. Only the internal development arm, Kwalee Labs, was closed. The parent company, Kwalee, remains operational as a publisher.
How many people were affected by the layoffs?
The closure of Kwalee Labs resulted in the loss of nine positions, according to reports from the team.
Is Luna Abyss still available to play?
Yes. The game remains available for purchase on PC, Xbox Series S/X, and PlayStation 5, and it continues to be part of the Xbox Game Pass library.
Why did the game fail commercially despite good reviews?
While official sales figures were never released, the low concurrent player counts suggest that the game failed to attract a large enough player base to cover development costs, despite positive sentiment from those who played it.
Pro Tip: If you are interested in how market trends affect independent development, check out our latest analysis on the state of the gaming industry to see which other studios are currently navigating similar challenges.
Are you a fan of sci-fi shooters? Let us know in the comments if you’ve had a chance to try Luna Abyss and what you think of its unique "bullet hell" mechanics.
