Dreamhaven Studios seeks a way forward after laying off publishing staff amid financial struggles

Last week, former Blizzard co-founder and current CEO of Dreamhaven Studios, Mike Morhaime, announced that the company laid off an undisclosed number of staff from the fledgling studio and even though an exact number was not mentioned, Morhaime confirmed the publishing branch of the company was most affected. These layoffs follow a recent report from Bloomberg, which outlines an internal e-mail sent by Morhaime to the Dreamhaven staff where he acknowledges the studio’s current financial struggles:

“Our monthly expenses are outpacing revenue,” Morhaime wrote. The focus now is “urgently reducing costs,” he said, adding that “we are committed to Dreamhaven surviving through this.”

Since its founding in 2020, Dreamhaven has helped publish two games as partners to outside studios, Game River’s Mechabellum in 2024 and FuzzyBot’s Lynked: Banner of the Spark in the beginning of 2025, followed by the release of two of their own games, Wildgate and Sunderfolk. Morhaime revealed that each games sales didn’t meet internal expectations (Wildgate sold 130,000 units while Sunderfolk sold 62,000 units at the time of Bloomberg’s report) despite the positive reviews each game has received thus far: Sunderfolk holds a very positive Steam rating and glowing console testimonials from individual outlets, though Wildgate has a more positive Steam rating with more mixed console reviews.

This combination of factors in both publishing and development led Morhaime to disclose to staff that Dreamhaven was seeking new financing and would be focusing on reducing costs in a commitment to Dreamhaven’s survival which unfortunately ended up being the termination of an unknown number of jobs, and presumably a scaling back of publishing games created by outside developers. Dreamhaven is still supporting both of their games for the time being — Sunderfolk is receiving different patches and fixes while Wildgate is in the middle of their post-release content rollout according to their 2025 roadmap.

It will be interesting to see what type of financing and other changes Morhaime and other Dreamhaven leadership will make, but their current challenges highlight the complexity of game development and publishing — even for seasoned developers and creators.