Splash Damage Enters Consultation Process Affecting Entire Workforce in Major Restructuring

British video game developer Splash Damage announced on November 26, 2025, that it has entered a formal consultation process impacting all staff members, signaling potential widespread layoffs across the company. The London-based studio, known for developing popular multiplayer games including Gears of War titles and Wolfenstein: Enemy Territory, has not disclosed exact numbers of affected employees but confirmed the consultation process encompasses its entire workforce.

The announcement marks a significant downturn for the independent developer, which has been a prominent player in the competitive multiplayer gaming space for over two decades. Industry sources suggest the consultation process, a legal requirement in the UK before implementing large-scale redundancies, indicates the company is facing substantial operational challenges.

Context of the Decision

The consultation process comes amid a challenging period for the gaming industry, with numerous studios facing financial pressures following years of pandemic-driven growth that proved unsustainable. Splash Damage's decision appears linked to broader market corrections affecting mid-tier game developers who expanded rapidly during 2020-2022 but now face reduced consumer spending and increased competition.

The studio has been working on several projects, including support work for major franchises and original intellectual properties. However, the increasingly competitive landscape for multiplayer games, combined with rising development costs and longer production cycles, has created significant pressure on independent developers. The shift toward live-service games has also required substantial ongoing investment that many studios struggle to maintain.

Market analysts point to the gaming industry's post-pandemic adjustment as a key factor, with companies that hired aggressively during lockdown periods now facing the reality of normalized consumer behavior and tighter budgets.

Impact on Operations

The consultation process affecting all staff suggests Splash Damage is considering fundamental changes to its business structure rather than targeted department cuts. This comprehensive approach indicates the company may be evaluating its entire operational model, potentially including its London headquarters and satellite offices.

Given Splash Damage's focus on multiplayer game development and work-for-hire projects for major publishers, the restructuring likely affects multiple departments including programming, art, design, and quality assurance teams. The company's reputation for technical expertise in multiplayer systems and engine development has made it a valuable partner for larger studios, but maintaining these capabilities requires significant ongoing investment.

The timing of the announcement, coming near the end of the fiscal year for many gaming companies, suggests the decision may be tied to project completions or contract renewals that didn't materialize as expected.

Company Financial Background

Founded in 2001, Splash Damage built its reputation through innovative multiplayer experiences and technical partnerships with major publishers including Microsoft, Bethesda, and Activision. The studio gained prominence with Wolfenstein: Enemy Territory and later worked on significant franchises including Gears of War and Dirty Bomb.

As a privately held company, Splash Damage's financial details remain largely confidential, but the studio has historically relied on a combination of work-for-hire contracts and original game development. This business model, while providing steady revenue streams, can create vulnerability when contracts end or publishers shift priorities.

The company has faced previous challenges, including the closure of its free-to-play shooter Dirty Bomb in 2019, which represented a significant investment in original intellectual property that failed to achieve commercial success.

Industry Outlook

The gaming industry has experienced a wave of layoffs throughout 2025, with companies ranging from major publishers to independent studios announcing workforce reductions. The sector faces multiple headwinds including market saturation, increased development costs, and changing consumer preferences toward established franchises and live-service games.

For specialized developers like Splash Damage, the challenge lies in maintaining technical expertise while adapting to evolving market demands. The rise of artificial intelligence tools in game development and the increasing dominance of major publishers in the multiplayer space have created additional competitive pressures.

Conclusion

Splash Damage's entry into consultation represents another significant development in the gaming industry's ongoing restructuring. The company's future will likely depend on its ability to adapt its business model while preserving the technical expertise that has defined its two-decade legacy. The outcome of the consultation process will determine whether the studio can navigate current market challenges or joins the growing list of casualties in the industry's post-pandemic adjustment period.