The Lord of the Rings: Gollum studio shuttered as Daedalic restructures to focus on its publishing arm

Daedalic Entertainment has announced it is closing its development studio and will shift focus over to its publishing arm.

News of the restructuring was first reported by German games industry site GamesWirtschaft, with the article stating the Hamburg development studio would be closed, and 25 out of over 90 employees would be affected.

Daedalic told the site it would support its former employees by finding new opportunities within its network.

As part of the restructuring, a game based on The Lord of the Rings game was canceled. In the works since mid-2022 and slated for release at the end of 2024, Daedalic never officially announced the title that was in the works under the codename It’s Magic.

According to a database entry with Germany’s Ministry of Economics (BMWK), which coordinates federal computer games funding, the game featured a lush world “full of mythical creatures and magic.” Like the developer’s ill-received The Lord of the Rings: Gollum, codename It’s Magic would tell the game’s story from a character’s perspective that “hasn’t been told before.” The Lord of the Rings game would also feature “completely new regions” with the fate of the game world influenced by player decisions.

As far as the elephant in the room is concerned, in a statement to Polygon, Daedalic addressed The Lord of the Rings: Gollum, stating that even though the game did not “live up to expectations,” the company is “grateful for the opportunity and the learning experience it brought us.”

Presently, Gollum’s development team is working on another patch for the title. Daedalic also said it has “eight promising releases” in the publishing pipeline that will release during the company’s current financial year.