Kwalee Labs Looks to Have Been Shut Down After Poor Commercial Performance of Luna Abyss

kwalee labs layoffs

Last Updated on Jun 16, 2026 @ 17:56:58 PM.


It’s 2026. It feels like we can’t go a few days without some studio being impacted by developer layoffs. Just yesterday it was revealed that XBOX was shuttering three studios, Double Fine, Ninja Theory (who just announced a new game, Senua, at Summer Game Fest), and Compulsion Games, and today it looks like they were joined by Kwalee Labs, the indie development side of Kwalee, the publishing giant.

According to the below LinkedIn Post, all of the staff are affected and were blindsided by the decision “out of their control”:

Luna Abyss was a boomer shooter that attempted to tell a different story, and for the majority of the time, managed to. Set upon a prison colony on the moon, you played as Fawkes, a character that seemingly had much more destiny about her than she realised. Spewing bullets as quickly and widely as you could, it was reminiscent of Returnal and Saros in places, but with a unique art style and environments definitely struck a chord with me, and many others that played it. Unfortunately it does look like it didn’t perform well enough to save the studio, though.

I’ve reached out for comment and will update as in due course.

For more from us, check out the latest collaboration for The First Descendant, or Outward 2’s unfortunate delay into 2027.

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