If you thought the latest tsunami of awfulness to crash over the videogame industry would be contained to yesterday, I have bad news. Romero Games, the studio founded in 2015 by industry legends Brenda and John Romero, announced today that funding for its latest project has been cut off, and it's been forced to lay off employees.
"Last night, we learned that our publisher has canceled funding for our game along with several other unannounced projects at other studios," CEO Brenda Romero wrote in a message shared on social media. "This was a strategic decision made at a high level within the publisher, well above our visibility or control. We deeply wish there had been something, anything, we could have done to prevent this outcome.
"This absolutely isn't a reflection of our team's work, performance, or the quality of the project itself. We hit every milestone on time, every time, consistently received high praise, and easily passed all our internal gates. We are incredibly proud of the work being done, and of the talented team behind it."
Romero didn't state explicitly that layoffs are being made, but did note that many people at the studio have worked together for more than 10 years, some for more than 20, "and we're heartbroken that it's come to this. If you know of any opportunities or ways you can help our incredible team, please reach out."
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— @romerogames.bsky.social (@romerogames.bsky.social.bsky.social) 2025-07-03T15:48:24.880Z
The message doesn't specify which publisher cancelled Romero Games' funding, but multiple former employees have said in messages posted to LinkedIn that it was Microsoft, which laid off 9,000 employees yesterday and cancelled projects at ZeniMax Online Studios, Rare, and The Initiative, which it closed outright.
The fate of Romero Games itself is also unclear. The studio's message doesn't touch on what happens next, but both technical artist Leslie Stowe and environment artist Eric Wong said in LinkedIn posts that the studio is closing completely.
Romero Games was "working with a major publisher" on an all-new FPS that studio co-founder John Romero described as "a new dawn" for the studio when it was announced in 2022. Nothing further has been shared since then (the Romero Games website still says "it’s way too early" to reveal more) but the fact that a small studio headed by John and Brenda Romero can't get funding for a new FPS does not speak well for the state of the industry, especially if Microsoft—which you'll recall plans to spend $80 billion on AI in 2025 alone—is in fact the publisher that pulled the plug.
I've reached out to Romero Games for more information and will update if I receive a reply.
