Demiurge Studios, a studio currently working as co-developer for Riot Games on the highly anticipated fighting game 2XKO has recently undergone layoffs across multiple departments, according to reports from gamedeveloper.com and several LinkedIn testimonies. Six developers have publicly confirmed they were affected by the recent job cuts, which impacted roles in quality assurance, production, and UX/UI design.

The development team owned by the Embracer Group, which also works on Blizzard’s Hearthstone, had just hired new staff as recently as last week. A paradoxical situation that speaks volumes about the volatile nature of today’s gaming industry.

Beyond 2XKO, the North American studio has also collaborated with Riot Games on Teamfight Tactics. Executive Producer Justin Webb had recently revealed that Demiurge was also developing “a AAA action game based on a beloved IP,” and was actively hiring just a month prior to the layoffs.

An industry in trouble

These cuts come amid ongoing financial struggles for the Embracer Group, which has been undergoing waves of restructuring since 2023. Acquired in 2021 through its subsidiary Saber Interactive, Demiurge was retained by Embracer even after Saber’s core assets were sold off in 2024. According to gaminglayoffs.com, nearly 3,500 people have lost their jobs in the video game industry in 2025 alone.

Despite these internal challenges, development on 2XKO continues. Riot Games recently announced Vi as the latest playable character and confirmed the closed beta is set to launch on September 9. The free-to-play 2v2 fighting game set in the League of Legends universe was also showcased at EVO Los Angeles, giving fans a hands-on preview of its unique gameplay ahead of its expected 2025 release.