Phoenix Labs Announces Significant Workforce Reduction Following Forte Labs Acquisition

Dauntless and Fae Farm creator Phoenix Labs has terminated the employment of “a majority” of its staff just a month after launching a poorly received update to the struggling title as part of its debut on Steam.

The company conveyed this decision in a post on LinkedIn, stating that today represents “another challenging day” for the studio. It expressed that this decision was part of “unfortunate but essential adjustments to [its] operations.”

“We recognize and sincerely value the contributions of every individual affected,” the statement continues. “Their talent, commitment, and ingenuity have left an enduring impact on our company and our games.” The firm also mentioned that it would share “more specifics” in the upcoming weeks regarding how these departures influence Fae Farm and Dauntless, its two released titles. Dauntless operates as a free-to-play live service game, while Fae Farm is a premium title featuring online multiplayer.

Today’s layoffs follow a few months after Game Developer reported internal strife at the studio post-2023 acquisition by blockchain company Forte Labs. Former Phoenix Labs employees disclosed that the new parent company established a culture of stringent secrecy, inhibiting communication between teams and seemingly attempting to obscure its ownership from potential recruits.

Related:
What occurs when a secretive blockchain firm acquires your game studio

Right after our report, Phoenix Labs released its flagship monster-hunting game Dauntless on Steam, only to be critiqued by players for its new in-game monetization model and removing past progress with the new “Awakening” update. The game currently holds an “Overwhelmingly Negative” rating on Steam.

The poor response to this update may have adversely affected the company’s prospects at the end of 2024, making today’s layoffs more plausible. According to SteamDB, the number of simultaneous players peaked briefly at around 3,200 upon its initial Steam release, but rapidly dropped in the days following. Currently, the game averages between 130-160 concurrent players on a daily basis.

Phoenix Labs’ Dauntless was a success upon its initial release—what changed?

When Dauntless was first launched in 2019, it became a genuine success, attracting 500,000 players across the Epic Game Store, Xbox One, and PlayStation 4. The game—originally funded and published by Epic Games—was an early proponent of cross-platform play. This was only two years after Epic Games “accidentally” enabled cross-platform functionality in its flagship battle royale title Fortnite, which was followed by public advocacy from CEO Tim Sweeney for platforms like Xbox and PlayStation to reduce the multiplayer barriers between systems.

Today, cross-play multiplayer is a widely accepted feature for several titles and is no longer a differentiating factor in marketing.

Phoenix Labs continued to support Dauntless while also establishing different teams to develop games like farming simulator Fae Farm and the now-canceled dragon-themed crafting survival game codenamed “Project Dragon,” along with several other games ultimately canceled in 2024. Many of these initiatives were initiated under its then-parent company Singaporean publisher Garena (a subsidiary of Sea Ltd), which distanced itself from Phoenix Labs in 2023.

The firm had already laid off over 160 employees prior to this significant reduction in staff, in the months following the acquisition by Forte Labs. During that time, its new owner reportedly urged developers to outline plans for integrating blockchain technology into its games for the purposes of buying and selling, as well as trading in-game items, according to former employees who spoke with Game Developer. No blockchain titles or mechanics have been publicly announced by Phoenix Labs.

Game Developer has reached out to Phoenix Labs for comments and will update this story when a response is received.

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