Dontnod Warns It May Not Survive Past January 2027 Without New Funding

Dontnod Entertainment has told investors it faces "material uncertainty" about its ability to keep operating beyond January 31, 2027, after revenue fell 56 percent year-on-year in the first half of 2026. The Life Is Strange and Lost Records: Bloom and Rage developer disclosed the warning in a financial statement released the week before September 10, according to Kotaku.

The company brought in €6.1 million in the first half of 2026, down from roughly double that in the same period a year earlier. Dontnod's statement attributes the gap to the timing of its releases: the prior-year comparison period followed the launch of Lost Records: Bloom and Rage, while the current period follows this year's science fiction adventure Aphelion. The implication in the filing is that Aphelion sold less than its predecessor.

Dontnod's own language in the statement is blunt about the consequences. Its "ability to continue operations depends partly on securing external financing to cover business operation and project development needs," the company wrote, adding that this "represents material uncertainty regarding the company's ability to continue as a going concern beyond January 31, 2027." Liquid assets in cash and other transferable holdings have declined alongside revenue.

One source of money has already come in. Dontnod's Montreal team is developing an unannounced narrative game based on what the filing describes as "a major Netflix intellectual property," and that project generated additional investment. It was not enough to offset the revenue decline.

The studio is weighing a restructuring that "may involve the reduction of up to 90 positions," though no decision has been finalized. Under the plan, Dontnod's French teams would be refocused entirely on a single project as the company seeks new funding. Kotaku reports that layoffs appear likely and that outright closure has not been ruled out.

The most significant potential backer has stayed on the sidelines. Tencent invested in Dontnod in 2021 and holds a 41.9 percent stake in the studio, but has chosen not to make short-term investments to help it through the current situation. That leaves Dontnod dependent on outside financing it has not yet secured.

Dontnod is known for the original Life Is Strange, the episodic series that established its reputation for narrative-driven adventure games, and more recently for Lost Records: Bloom and Rage and Aphelion. The company's filing frames the problem as a cash and financing issue rather than a shutdown already in motion: the 90-position reduction is described as a possibility under consideration, not a completed action.

What remains unresolved is whether Dontnod can close a funding round in the coming months, and on what terms. The company has not announced a deadline for that process beyond the January 31, 2027 date attached to its going-concern warning, and it has not named the Netflix property behind the Montreal project.