Daedalic Entertainment closes its development studio and cancels its second Lord of the Rings game

Daedalic Entertainment, the German developer and publisher behind The Lord of the Rings: Gollum, has announced that it is shutting down its development studio and will focus on its publishing arm. The decision comes after the poor reception of Gollum, which was released in May 2023 and received mostly negative reviews from critics and players.

Also read: The Lord of the Rings: Gollum – A Disappointing Journey

What happened to Gollum?

The Lord of the Rings: Gollum is an action-adventure game that follows the journey of Gollum, the corrupted hobbit who is obsessed with the One Ring. The game was announced in March 2019 and was supposed to be released in September 2021, but it suffered from numerous delays and setbacks. It was finally released in May 2023 for PC, PlayStation 5, Xbox Series X/S, Nintendo Switch, and Stadia.

However, the game did not live up to the expectations of fans and critics, who criticized its graphics, gameplay, story, and technical issues. The game currently has a Metacritic score of 42/100 for PC, 39/100 for PS5, and 38/100 for Xbox Series X/S. Eurogamer’s Christian Donlan gave the game a 1 out of 5 rating and called it a “well-intentioned mess”. He wrote:

“Gollum is a game that feels like it’s been made by people who love Tolkien but don’t understand him. It’s a game that tries to be faithful to the source material but ends up betraying it. It’s a game that wants to be immersive but is constantly breaking the illusion. It’s a game that has ambition but lacks polish. It’s a game that is full of potential but fails to deliver.”

In a statement to Polygon, Daedalic addressed the failure of Gollum and said that it was “grateful for the opportunity and the learning experience it brought us”. The company also said that the development team was working on another patch for the game to fix some of the issues.

What about the second Lord of the Rings game?

According to a report by German website Games Wirtschaft, Daedalic was also working on another game based on The Lord of the Rings franchise since mid-2022. The game had the codename “It’s Magic” and was slated for release at the end of 2024. However, Daedalic never officially announced the game or revealed any details about it.

The report claims that the game was supposed to feature a lush world full of mythical creatures and magic, and tell a story from a character’s perspective that hasn’t been told before. The game would also include completely new regions and player choices that would influence the fate of the game world.

However, as part of Daedalic’s restructuring, the game has been canceled and will not see the light of day. The report cites a database entry with Germany’s Ministry of Economics (BMWK), which coordinates federal computer games funding, as the source of information about the game.

What does this mean for Daedalic?

Daedalic Entertainment was founded in 2007 and is best known for its point-and-click adventure games such as Deponia, Edna & Harvey, The Whispered World, and The Dark Eye. The company also ventured into other genres such as strategy with A Year of Rain and narrative with The Pillars of the Earth. However, none of these games achieved much commercial success or acclaim.

In 2021, Daedalic closed its Düsseldorf and Munich studios and laid off some employees. In June 2023, Daedalic announced that it was closing its Hamburg development studio and laying off 25 more employees out of a team of more than 90. The company said that it would support its former employees in finding new opportunities within its network.

Daedalic also said that it would shift its focus to its publishing arm and that it had eight promising releases in its pipeline for the current financial year. One of these releases is Surviving Deponia, a new entry in the Deponia series developed by external studio AtomicTorch.

Daedalic’s decision to exit game development and cancel its second Lord of the Rings game is a sad end to its ambitious attempt to create games based on one of the most beloved fantasy franchises in history. It also raises questions about how well other developers will handle Tolkien’s legacy in their upcoming games such as Amazon’s MMO or Warner Bros’ Gollum-less sequel to Shadow of War.