According to Wccftech, developer and publisher DON’T NOD has reported disappointing financial results for the first half of 2025, with their recent release Lost Records: Bloom & Rage performing “below expectations” following similar underperformance from last year’s Banishers: Ghosts of New Eden and Jusant. The studio’s total operating revenue declined 5% year-over-year to €13.9 million, though recent release The Lonesome Guild on October 23, 2025 offers some hope. More significantly, DON’T NOD has signed a deal with Netflix to create a narrative game based on “a major IP” through its Montreal studio, with Netflix handling publishing duties. This partnership comes amid Netflix’s recent closure of its Squid Game: Unleashed studio Boss Fight Entertainment, raising questions about the streaming giant’s gaming commitment.
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The Narrative Gaming Crossroads
DON’T NOD’s struggles highlight the challenging economics of narrative-focused gaming. While the studio helped pioneer the modern narrative adventure genre with titles like Life is Strange, the market has become increasingly crowded and demanding. The issue isn’t necessarily quality—DON’T NOD’s recent titles have maintained strong critical reception—but rather discoverability and commercial scalability in an era where player attention is fragmented across countless live service games and subscription services. The studio’s consistent pattern of underperformance suggests either misaligned production budgets, inadequate marketing investment, or both. When even well-reviewed narrative games struggle to find commercial success, it raises fundamental questions about the sustainability of mid-tier development in this genre.
Netflix’s Gaming Strategy in Flux
The timing of this partnership is particularly intriguing given Netflix’s recent studio closures and strategic ambiguity in the gaming space. Netflix’s approach has been inconsistent at best—simultaneously investing in gaming while shuttering internal development capabilities. The closure of Boss Fight Entertainment days before announcing this DON’T NOD deal suggests a pivot toward third-party publishing partnerships rather than internal development. This could represent a smarter allocation of Netflix’s resources, leveraging their IP portfolio and distribution platform while leaving game development to specialists. However, it also raises questions about Netflix’s long-term commitment level and whether they view gaming as a core business or merely a value-add for their streaming subscribers.
The Major IP Opportunity and Risks
The “major IP” component of this deal represents both significant opportunity and substantial risk for DON’T NOD. Working with established IP provides immediate brand recognition and built-in audience appeal, potentially solving the discoverability issues that have plagued their original titles. However, it also constrains creative freedom—the very quality that made DON’T NOD’s earlier work so distinctive. The studio’s strength has always been in creating emotionally resonant, character-driven stories with original worlds and concepts. Adapting someone else’s vision, particularly under the pressure of meeting financial expectations after multiple disappointments, could compromise their creative identity. Additionally, the success of such projects often depends heavily on the specific IP chosen and how well it translates to interactive storytelling.
Broader Market Implications
This partnership reflects larger industry trends where traditional gaming companies are increasingly collaborating with entertainment giants seeking to expand into interactive media. For mid-tier developers like DON’T NOD, such deals offer financial stability and access to larger audiences, but often at the cost of creative control and ownership. The success or failure of this arrangement could influence how other narrative-focused studios approach similar partnerships. If successful, we might see more specialty developers partnering with media companies to adapt established IP. If it fails, it could reinforce the notion that narrative gaming’s commercial ceiling remains limited, potentially affecting investment across the genre.
Realistic Outlook and Challenges
The path forward for DON’T NOD remains fraught with challenges. Their recent financial performance suggests they need this Netflix partnership to succeed more than Netflix needs it. The studio must navigate the delicate balance of maintaining their narrative expertise while adapting to the constraints of working with established IP. Technical considerations also come into play, as their Montreal studio will need to scale appropriately for what’s likely a higher-profile project than their recent original titles. Market timing is another critical factor—by the time this game releases, the narrative gaming landscape may have shifted significantly. The studio’s ability to learn from their recent commercial disappointments while preserving their creative soul will determine whether this Netflix deal represents a true turnaround or merely a temporary reprieve.
