Gaming Startup Failures

The world's most famous gaming brand went from $725M SPAC valuation to $17M fire sale in 24 months.

Built the rails for a metaverse train that never left the station.

Unity retroactively changed pricing on 3 million developers — and lost its CEO

Community esports became in-game ads became metaverse hype; the stock fell 99%.

Five years of development erased in a single publisher phone call.

The studio behind Harry Potter: Hogwarts Mystery and Cookie Jam filed Chapter 11 in 2024 — $480M in claims, 900 employees, and a lesson in debt-financed mobile gaming

'Roblox for adults' raised $100M and never found its audience.

A beloved MMORPG franchise couldn't survive being grafted onto a blockchain nobody wanted.

1.2 million players loved the game but none would pay enough to keep it alive.

Pax Dei launched with a16z backing and lost 90% of players in weeks.

A small indie publisher absorbed by a struggling parent couldn't survive 2024's gaming downturn.

ArenaNet's founder shut down 70 employees in one day with zero severance.

The mobile esports SPAC unicorn — discovered that real-money gaming has regulatory and CAC problems that don't scale.

Viral shooter fame couldn't sustain a $1.5B valuation built on a single game.

The Dauntless studio raised $100M to compete with Monster Hunter and was shut down by its own parent company

Interactive live events platform raised $150M from Sony and Bitkraft to let audiences vote on game outcomes—then shut down in 2023 as the "massively interactive live event" category failed to find its audience.

The $4B NFT empire built on cartoon apes and celebrity hype — APE token fell 97%, the Otherside metaverse land sale cost users $150M in gas, and the empire quietly imploded.

Bet the whole metaverse on NFTs and lost everything when crypto winter hit.

The instant games unicorn raised $100M at $1B in 2020 and shut down before its games reached scale

Kevin Rose's $1B NFT membership club that peaked in April 2022 — then CC0 licensing, a failed Ethereum migration, and team departures left holders with owls worth 95% less.

China's esports streaming IPO raised $775M — regulators killed the merger that could have saved it.

UK studio behind viral hit Fall Guys was acquired by Epic Games in 2021—then its game was made exclusive to Epic Games Store, PS4/Xbox versions were deleted, and the community collapsed.

The Twitch tooling platform raised $100M+ and then the streaming creator economy cratered

The blockchain gaming platform reached $7B market cap then was torn apart by a $130M insider exploit and co-founder war

The world's best CS:GO team tried to become a publicly traded eSports conglomerate and proved eSports can't make money

FarmVille creator — $10B IPO, Facebook algorithm change destroyed it overnight

Destroyed two decades of loyal IMVU users chasing a metaverse trend that never materialized.

German gambling law killed a €22M esports betting platform before it could scale.

A dungeon crawler dragged into real-world legal dungeons by its former employer.

Built a crypto gambling platform and was surprised when regulators called it gambling.

A play-to-earn dream that turned into earn-nothing-lose-everything for its players.

Built the world's sharpest VR headset and priced it for a market that didn't exist.

The "first decentralized metaverse casino" built inside Decentraland — DG token fell 99%, ICE poker wearables became worthless, and the metaverse never arrived.

The billion-dollar blockchain TCG that aimed to beat Hearthstone with NFT ownership — raised $200M, but GODS token fell 96% and active players plateaued far below targets.

Banner Saga's celebrated creators couldn't secure a publisher for game number four.

A listed game studio in Amsterdam got delisted for missing financial filings mid-metaverse pivot.

Tencent-backed gaming companions app hit 20M users, then regulators decided the model was illegal.

A Swedish gaming roll-up burned SEK 2B on acquisitions and collapsed when rates rose.

Arab gaming's poster child hit by Apple's privacy wall and a collapsing ad market.

Finland's post-Rovio mobile gaming IPO dream ended as a Netflix bargain-bin acquisition.

The play-to-earn NFT game with 2.8 million daily users and a $3B valuation — destroyed in one day when North Korea's Lazarus Group stole $625 million from its Ronin bridge

The play-to-earn revolution ended with a $625M North Korean heist and collapsing token rewards.

The $625M Ethereum bridge hack attributed to North Korean state hackers — the largest crypto theft in history at the time

Abandoned a profitable niche to chase AAA mobile dreams — and lost everything.

Blockchain gaming studio raised $150M from a16z and Andreessen to bring player-owned NFT economies to gaming—then laid off 50% of staff as the NFT market collapsed.

Axie Infinity's blockchain bridge was hacked for $625M — the largest crypto theft in history — and the play-to-earn model never recovered.

Abandoned a profitable enterprise AR business to chase Pokémon GO and caught nothing.

Built a live events esports business six months before COVID made live events illegal.

The original 10,000-piece NFT collection that launched the entire industry — then its founders sold out to Yuga Labs and the market promptly crashed 90%.

The NFT product that brought digital collectibles to mainstream audiences — peaking at $700M in monthly volume before the floor price of a LeBron dunk fell 99%.

Built a gaming tournament empire on COVID tailwinds that vanished with lockdowns.

Argentina's gamification adtech startup failed to convert Trivia Crack's viral fame into a durable brand product

The Minecraft-based NFT metaverse that Microsoft killed with a single terms of service update

The "get paid to exercise" app that hit $2.4B valuation in five months — then watched its GMT token fall 95% as the earn mechanism gutted itself.

Eight VR arcades hemorrhaging money, closed at a fraction of their build cost.

Japan's esports production pioneer died when COVID killed live events and sponsors disappeared.

Built a $50M+ esports arena in Las Vegas and sold it for $6.65M.

35 VR venues worldwide, zero revenue for 12 months — COVID made the math impossible.

France's cloud gaming pioneer burned €100M proving GPU streaming is brutally expensive.

COVID killed what four years of esports couldn't — Nexon's flagship venue.

A $50M bet on Western mobile gaming returned nothing but a failed acquisition spree.

Microsoft's gaming streaming platform signed Ninja for a reported $30M+ to steal market share from Twitch — and shut down 18 months later after failing to build a viable audience.

Finland's puzzle RPG hit studio was swallowed by Zynga and lost its creative soul in the process.

Microsoft paid $30M+ to bring Ninja over — his audience didn't follow.

Turkey's gaming crown jewel sold to Zynga for $1.8B, vanishing as an independent studio.

A Nasdaq-listed Taiwanese company wrote off $30M in esports after mobile games killed PC tournaments.

Bought two esports franchises it couldn't afford — then couldn't pay its players.

Built arenas for an esports boom that turned out to be a speculative bubble.

A racist investor torpedoed one of esports' most promising organizations.

Built the future of VR streaming before anyone owned a VR headset.

VR gaming meets physical retail — and both lose.

The most beloved esports brand destroyed by bad corporate parenting.

Germany's social gaming giant. Facebook platform changes ended it.

Built a mobile streaming platform that Apple and Google made redundant with a software update.

The studio that reinvented narrative gaming then abruptly laid off 250 staff in a single day

Cliffy B raised $16M for his comeback studio. LawBreakers flopped on launch. Radical Heights died in beta. Studio gone in 4 years.

The ex-Blizzard studio that built WildStar to challenge World of Warcraft — shut down by NCSoft when subscriber numbers never recovered from the launch window

Epic spent $150M+ building a MOBA, then Fortnite existed and nothing else mattered.

Made the most popular Marvel game online. Lost the Marvel license. Gave players 3 days notice before pulling the plug.

Caught in the regulatory crossfire meant for the giants—collateral damage in the DFS wars.

200 million children played Club Penguin. Disney shut it down. Kids streamed themselves crying.

The mobile strategy gaming company that hit $400M in revenue at its peak — then watched the mobile gaming market consolidate around a handful of mega-titles

The studio Peter Molyneux founded after leaving Bullfrog — creator of Black & White and Fable — was shut by Microsoft in April 2016 as Fable Legends was cancelled mid-development.

The creator of SimCity and The Sims was shut by EA in 2015 after a botched always-online SimCity relaunch nearly destroyed the franchise.

Brazil's Zynga — until Zynga sued them for being too similar

The Dark Age of Camelot studio was shut by EA in 2014 after Warhammer Online's subscriber base collapsed from 800K to under 100K in eighteen months.

Monopoly meets Foursquare — 7 million users couldn't save it when location gaming fell out of fashion.

The French-American publisher of Atari, Driver, Roller Coaster Tycoon and Dungeons and Dragons filed Chapter 11 in January 2013 after decades of mismanagement.

The baseball pitcher's video game studio that took a $75M Rhode Island state loan and collapsed before the game shipped

The publisher of Saints Row and SpongeBob that bet $200M on a plastic drawing tablet — and filed Chapter 11 when it failed

The Rise of Nations studio survived one acquisition by THQ — only to be sold to 38 Studios, which collapsed two months after Kingdoms of Amalur shipped.

The studio behind Darksiders — the only THQ studio not purchased in bankruptcy because no buyer wanted it, leaving 80 developers without severance

OnLive invented cloud gaming a decade before the infrastructure existed to support it.

The studio that created Lemmings and WipEout was shut by Sony in 2012 — 19 years after the acquisition — when the racing genre declined on PlayStation platforms.

The studio that made Project Gotham Racing and Geometry Wars was closed by Activision after Blur failed to outsell a direct competitor released the same week.

THQ's New York studio made Homefront — and was shut three months after launch when the game sold 2.6M copies but fell short of THQ's 3M target.

Creator of Fallout and Baldur's Gate — filed for bankruptcy after selling the Fallout IP to Bethesda for $1.15M and failing to complete a promised Fallout MMO

The creator of Crackdown launched APB — a $100M online shooter with subscription pricing — and went into administration 79 days after launch.

The creator of Mortal Kombat and NBA Jam — bankrupt when console game development costs outpaced a publisher without a franchise strategy

The Age of Empires studio was closed by Microsoft the same week Halo Wars shipped gold.

The studio that made TimeSplitters — founded by four ex-Rare GoldenEye developers — went into administration in 2009 after Haze received some of the worst PS3 launch reviews.

The studio behind Star Wars Rogue Squadron bet its future on Lair — PS3's worst-reviewed AAA launch — and went bankrupt two years later.

Creator of Star Wars Battlefront and Mercenaries — acquired by EA for $300M and shut down 2 years later after commercial underperformance

The Swedish studio behind Bionic Commando: Rearmed went bankrupt weeks after their 3D reboot flopped — despite the remaster being one of 2008's best-reviewed games.

Blizzard veterans raised $30M to make Hellgate: London — then went bankrupt three months after launch when it failed to sell enough copies to break even.

The cult studio behind Earthworm Jim and MDK was acquired by Atari, forced to make movie tie-ins, and quietly closed when its last project flopped.

The Mortal Kombat and Turok publisher filed Chapter 7 in 2004 after a string of commercial failures, cancelled games, and bizarre marketing stunts that cost more than they earned.

The studio that invented the god game genre — Populous, Theme Hospital, Dungeon Keeper — was slowly dissolved by EA over nine years after their 1995 acquisition.

EA founder Trip Hawkins launched a 700 dollar gaming console that lost to PlayStation and spent a decade pivoting until bankruptcy in 2003.

The team that made Fallout 2, Planescape: Torment, and Baldur's Gate was shut down in December 2003 when parent company Interplay ran out of money.

The creator of Command & Conquer and Red Alert was absorbed into EA Los Angeles in 2003 — five years after a $122M acquisition that promised independence.

Trip Hawkins' post-EA gaming hardware bet — launched a $699 console in 1993 when the competition sold for $199, and never recovered from the price gap

Pioneer Chinese internet gaming company that dominated the PC online game era and was destroyed by the mobile gaming revolution it failed to pivot into.

Argentine-founded social gaming giant with 50M users crushed by Zynga's lawsuit and the Facebook platform collapse.

Mexico gaming competing against Activision COD Mobile (60M users), Free Fire, and Xbox Game Pass at MXN 129/month

Dominican Republic's gaming platform for a community that didn't need a Dominican gaming platform

Bolivia's gaming startup for gamers who had to budget their data to play

Mexico's free tournament platform that forgot to build a business

El Salvador's gaming platform for players who wanted to compete but couldn't afford the tournament fees

Nicaraguan mobile gaming platform hit by political crisis advertiser exodus and tiny TAM

Mobile games publisher challenging Supercell in Europe

Bigpoint was Europe largest browser gaming company with 300 million registered users — then the mobile gaming revolution arrived and its Flash-based empire was sold to a Chinese buyer for a fraction of its former valuation.

Bolivia's second gaming platform proving the first platform's conclusion was correct

Chile's esports tournament operator that couldn't afford the players needed to attract the sponsors needed to afford the players

Cuba's gaming startup in a country where the government decides what games you can play online

Bolivia's third gaming attempt — the founders said publicly they knew it would fail but wanted to prove it definitively

Battle royale pioneer that launched the genre and was then killed by it

Ecuador's gaming platform for a gaming community that organized across borders, not within them

Uruguay's gaming platform for players who preferred competing in Argentina's tournaments

Colombia's esports platform that copied the playbook without reading the market

Costa Rica's esports league that couldn't generate enough sponsorship to pay competitive prize pools

El Salvador play-to-earn gaming launched on the Bitcoin Legal Tender wave — Bitcoin fell 70%, Axie Infinity collapsed 95%, and the IMF forced policy rollback

Paraguay's gaming platform for the gamers who were already on Twitch and Discord

Digital gaming currency top-up platform for Thai gamers

EA's Dead Space studio was closed mid-development on a Star Wars game as the industry shifted away from linear narrative.

Peru's second gaming platform proving the first platform's structural analysis was correct

The studio that made System Shock 2 and BioShock was dissolved by its own creative director immediately after BioShock Infinite shipped.

Peru's gaming platform that Twitch's Spanish content expansion made redundant

Nicaragua's gaming community that the Digital Economy Law classified as a telecom service

Panama's gaming platform for a gaming community that was already on Discord

Esports social gaming platform that let sports fans play mini-games and compete in the fandom of their favorite teams alongside other fans

Barcelona social casino gaming startup with 30M users, absorbed by Playtika and stripped of its independent identity.

Argentina's indie game studio that the economy kept looting

Costa Rica's gaming platform that Twitch already served better than any local alternative could

Starbreeze rode the success of Payday 2 into a reckless acquisition and VR spending spree — ending in a police raid over insider trading allegations, CEO arrest, and a Swedish reconstruction filing in January 2019.

Mexico's mobile games studio killed by a Google algorithm update

Guatemala's esports league that couldn't pay players enough to justify playing

Venezuela's gaming startup killed by the currency that made its server bills unpayable

Spanish mobile gaming studio ran out of runway after first hit game revenue faded

Guatemala's esports platform that couldn't beat the internet's natural gravity toward Twitch

Argentina esports platform where BCRA restrictions blocked USD prize payments to Argentine players and Stripe/PayPal restricted Argentine accounts

Honduras's gaming tournament platform for a country where competitive gaming required connectivity most players didn't have

Play-to-earn blockchain game that employed 40,000 Filipinos before collapsing in a $625M hack and Ponzi economics.

Mark Cuban-backed esports betting startup raised $25M, sold an unregistered crypto token, paid a $6.1M SEC settlement, and sold assets to survive.

Bossa Studios made Surgeon Simulator — one of the most viral games of the 2010s — and still could not build a sustainable indie game business on the back of it

Berlin MMO studio raised 26 million euros over seven years to build a persistent online world called Seed and shut down before it ever launched.

The legendary creator of Monkey Island, Grim Fandango, and Jedi Knight was shut down by Disney four months after acquiring Lucasfilm.

The Dominican Republic's third gaming platform attempt for a community that had already chosen Twitch

Chile's esports platform replaced by Twitch adding Spanish-language features

Balkan gaming unicorn could not escape the shadow of Top Eleven

Indonesian gaming voucher and digital payments platform displaced by mobile wallet integration.

Panama's third esports attempt in a market that couldn't generate enough sponsorship to pay tournament winners