Phoenix Labs Faces Major Layoffs Amid Controversial Monetization Changes and Industry Instability
Phoenix Labs, a Vancouver-based video game development studio, has announced significant workforce reductions affecting the majority of its approximately 90 employees. The company, known for developing titles such as Dauntless and Fae Farm, revealed the layoffs through an official LinkedIn announcement, with further details regarding the future of their game properties expected in the coming weeks.
This reduction in force comes in the wake of recent struggles, particularly following the December 5th release of Awakening, the latest expansion for their flagship game Dauntless. The expansion faced considerable backlash from the gaming community due to controversial changes in its monetization approach. Players discovered that their previous in-game progression had been reset, with much of their earned equipment becoming available only through new
microtransactions – effectively requiring players to repurchase content they had already acquired through gameplay.
This aggressive monetization strategy marked a significant departure from the game’s previous business model and has been linked to the influence of Forte Labs, a blockchain gaming company that acquired Phoenix Labs in 2023. The acquisition itself was notably characterized by unusual secrecy, and industry analysts have suggested that Forte Labs’ ownership has led to substantial changes in Phoenix Labs’ operational approach.
The current layoffs follow a previous round of staff reductions in May 2024, which was reportedly initiated under Forte Labs’ direction and included the cancellation of an unnamed major project. Dauntless, which launched in 2018, had established itself as a cooperative monster-hunting game where players team up to defeat creatures known as Behemoths, using salvaged parts to craft improved equipment and tackle increasingly challenging content.
These staff reductions at Phoenix Labs contribute to an ongoing trend of instability in the video game industry, with multiple companies announcing layoffs and studio closures in early 2025. Other recent examples include Ubisoft’s closure of a UK studio and minor staff reductions at Seattle’s Highwire Games.
The community’s response to Awakening’s launch on Steam was
particularly negative, as the expansion introduced unexpected monetization elements that fundamentally altered the game’s
progression system. This strategic shift represented a marked change for Dauntless, which had previously maintained a reputation for fair monetization practices.
The impact of these layoffs on the ongoing development and support of both Dauntless and Fae Farm remains unclear, with Phoenix Labs promising to provide additional information about the future of these properties in subsequent announcements. The studio’s restructuring reflects broader challenges facing the gaming industry, where changes in ownership and business strategies can significantly impact both development teams and player communities.
The situation highlights the complex relationship between game developers, corporate ownership, and player expectations, particularly when established games undergo significant changes to their core systems and monetization strategies. The controversy surrounding Awakening’s release and its potential connection to these layoffs underscores the delicate balance between business objectives and maintaining player trust in the games-as-service model.
These developments at Phoenix Labs represent one of the largest gaming industry workforce reductions thus far in 2025, adding to an ongoing pattern of instability in the sector. The full implications of these changes for both the studio’s remaining staff and their game properties will likely become clearer as Phoenix Labs releases more details about their restructuring plans.
