Kwalee Labs shut down following launch of Luna Abyss

Kwalee Labs, the studio behind Luna Abyss, has been closed only weeks after the game shipped on PC, PS5, Xbox, and Steam. The team was originally Bonsai Collective, bought out of administration by Kwalee in September and then rebranded as Kwalee Labs. CEO Hollie Emery said the redundancies were “completely outside of our control,” and confirmed the whole nine-person team is now available for work.

For developers, the important takeaway is how little breathing room a launch can provide, even when the game lands well. Luna Abyss reportedly sold 12,000 units on Steam and was described by the team as having strong critical and industry support, but that wasn’t enough to keep the studio intact. That makes this less about product quality and more about the fragility of small teams operating under publisher or parent-company pressure.

The studio’s history also matters here: Bonsai Collective was founded in 2019 as a fully remote team, led by Emery after time at Team17, and had previously secured a $3.5 million investment from Super.com in 2021 as part of a publishing deal. Kwalee itself has been active on the publishing side this year, but this closure shows that even a successful release can sit inside a larger business decision that developers don’t control.

If you’re on the dev side, this is a useful case study in why launch planning needs to include post-launch employment risk, not just marketing and certification. Small teams especially may want to think hard about runway, contract structure, and what happens if a parent company changes direction right after release.