Also in this roundup: The Super Mario Galaxy Movie's record-breaking debut and the return of the Limit Break mentorship initiative.
Another week, another wave of industry upheaval. If you're experiencing déjà vu reading these headlines, you're not alone—the pattern of studio closures and layoffs has become grimly predictable.
The cycle continues unabated, but there are occasional bright spots worth celebrating. Let's dive into what happened this week across the gaming landscape.
via Game Developer // Legendary game designer Shinji Mikami has returned to development with a new venture. Years after leaving Tango Gameworks—the studio behind Hi-Fi Rush that he originally founded—Mikami has launched Tokyo-based Unbound Inc. The new outfit will collaborate with Shift Up, the studio behind Stellar Blade, on upcoming projects.
Doki Doki Literature Club removed from Google Play over depiction of sensitive themes
via Game Developer // Embracer Group has executed another round of layoffs, cutting 124 positions at Eidos Montreal. The Swedish holding company's restructuring campaign continues its destructive path through studios it acquired during its aggressive expansion phase. The move is frustrating but hardly unexpected given Embracer's recent track record.
via Game Developer // Indie studio Ivy Road has shut down after failing to secure a publisher for its next title, Engine Angel. The closure is particularly notable given the studio's pedigree—its team included The Stanley Parable creator Davey Wreden, Gone Home co-creator Karla Zimonja, and Minecraft composer Daniel 'C418' Rosenfeld. The studio had previously released Wanderstop.
via Deadline // Critical reception hasn't dampened box office performance for The Super Mario Galaxy Movie. Despite lukewarm-to-negative reviews, the animated sequel pulled in $34 million on its Wednesday opening, marking the strongest single-day debut of 2026 in the U.S. market. The film's performance suggests Nintendo's multimedia expansion strategy continues to resonate with audiences, regardless of critical consensus.
via IGN // Could Baby Steps be an unauthorized Uncharted sequel? IGN's Reb Valentine has compiled compelling evidence suggesting a connection between the two properties. Worth noting: the story dropped on April 1, so approach with appropriate skepticism.
via Develop Brighton // Ustwo's executive leadership will present at Develop: Brighton this July. CEO Maria Sayans, Chief Creative Officer Daniel Gray, and Chief Development Officer Peter Pashley will discuss the studio's business philosophy during the conference, scheduled for July 14-16 at the Hilton Brighton Metropole.
via GamesIndustry.biz // The Limit Break mentorship program has opened applications for its eighth year. The initiative connects underrepresented professionals with experienced mentors to advance careers within the gaming industry. Both mentee and mentor applications are currently being accepted.
via Games Fray // The United States Patent and Trademark Office has revoked a Nintendo patent covering gameplay mechanics for summoning sub-characters in battle scenarios. The decision is classified as non-final, leaving the door open for Nintendo to file an appeal.
Split Fiction dev Hazelight Studios accrues 50M total sales
via Game Developer // Rec Room will cease operations on June 1, 2026, despite raising over $300 million in funding and amassing 150 million users. The VR social platform cited an inability to achieve sustainable profitability, with operational costs consistently exceeding revenue. In its shutdown announcement, the company warned that the broader VR market faces significant challenges.
via Game Developer // The VR sector's troubles extend to Polyarc, developer of the Moss series. The studio has implemented workforce reductions following a major project cancellation and unsuccessful funding attempts. Specific headcount numbers were not disclosed.
Chris Kerr is an award-winning news editor at Game Developer with more than a decade of industry reporting experience. His work has been featured in Edge, Stuff, Wireframe, International Business Times, and PocketGamer.biz. He has covered major events including GDC, PAX Australia, Gamescom, Paris Games Week, and Develop Brighton.
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