Life is Strange studio Don't Nod opens safeguard proceedings to freeze debt in fight for survival

Life is Strange developer Don't Nod has opened safeguard proceedings in a effort to resolve its ongoing financial difficulties by freezing and restructuring its liabilities over an initial six-month observation period.

The French studio confirmed the news in its latest fiscal report, where it noted the Paris Business Court has approved the move and appointed French insolvency firm Selarl Detroit as an administrator.

Don't Nod CEO Oskar Guilbert said the company has undertaken a "profound transformation" since 2024 in an effort to become sustainable, but explained it is still not out of the woods.

"The video game industry continues to face an exceptionally challenging environment, marked in particular by highly selective access to financing. In this context, our current cash position does not allow us to adequately secure all the financing requirements associated with our operations and projects," he wrote.

"The application to open safeguard proceedings is a proactive, protective measure. It is intended to provide the necessary framework and time to build a sustainable solution, while continuing our operations and preserving the value of our assets, our projects and our expertise."

As noted in the company's 2026 half-year report (H1 2026), that restructuring plan has left 85 people in France at risk of being laid off. Don't Nod said H1 2026 represented a "challenging environment," with revenue falling by 14 percent year-on-year to €6.1 million. It also confirmed that sales of Aphelion came in below expectations. 

"Half-year revenues also amounted to €6.1 million, down 14 percent. Sales, at €3.5 million primarily comprised recognized revenues from PlayStation Plus and Game Pass for Bloom & Rage, initial sales of Aphelion and its inclusion in Game Pass, as well as the back catalogue," reads the report.

"However, sales of Aphelion came in below the Group's expectations, weighing on the half-year's performance. Development revenues totalled €2.6 million, generated by the Montreal teams' development of a narrative game based on a major Netflix IP."

The Netflix deal refers to a partnership between the company and the U.S. streamer that will result in the creation of a new narrative title based on a "major" franchise. The collaboration was announced in October 2025 and is being overseen by Don't Nod's studio in Montreal. 

Ultimately, Don't Nod recorded an operating (EBITA) loss of €4.3 million during H1 2026. Almost double the €2 million loss it posted this time last year. 

As we've heard before, Don't Nod reiterated its ability to survive beyond January 31, 2027, is still materially uncertain.