Kwalee Labs Closes After $30 Luna Abyss Launch, Cutting Entire 9-Person Team

Q: Why was a critically acclaimed game's entire team laid off just weeks after its successful launch?

The team was not laid off because *Luna Abyss* failed critically. By the available evidence, the cuts appear to have been driven by forces above the game itself: a business decision at Kwalee Labs or its parent structure that CEO Hollie Emery said was “completely outside of our control.” That wording matters. *Luna Abyss* launched on May 21 to generally strong reviews, with an 81 on Metacritic, and was praised for its combat, boss design, platforming and presentation. Nothing in the public record suggests the nine-person team was dismissed over poor reception. Instead, the lack of a stated reason points to broader financial, strategic or funding pressures rather than the quality of the project. This fits a wider pattern across the games industry in 2026, where acclaimed teams and even award-winning studios have still faced layoffs despite successful releases. Thousands of industry job cuts have already been recorded this year, reflecting a market in which publishers are reducing risk, restructuring operations and cutting costs even when individual games perform well with critics. What is still unknown is the precise trigger at Kwalee Labs. The company has not publicly explained whether the layoffs were tied to sales expectations, investor decisions, project pipeline changes, or a wider restructuring. So the clearest answer is that the team appears to have been caught in a corporate and industry downturn, not undone by the game’s reviews.

3 articles · Updated · Kotaku · Jun 16

Less than a month after Luna Abyss launched on May 21, Kwalee Labs said the studio is shutting down and its entire team was made redundant on June 15.
CEO Hollie Emery said the cuts were “completely outside of our control,” even though the debut shooter drew strong critical and player response.
Luna Abyss sells for $30 on Steam and consoles and also launched day-and-date on Game Pass; it currently holds an 86% positive Steam rating and more than 80 on Metacritic.
The closure underscores how even well-reviewed indie games with platform support and subscription exposure are still struggling to sustain small studios.