On May 25 this year, the stealth action game The Lord of the Rings: Gollum, developed by the German developer Daedalic Entertainment, was officially released. However, after its launch, the game received a wave of negative reviews and feedback, with players criticizing its poor optimization, lackluster content, rough textures, and unsatisfactory stealth gameplay, among other issues. It also received extremely low ratings of 2.0 from international medias. As the controversy escalated, the official team had to issue an apology statement in response to the situation.

Also, according to German media Games Wirtschaft, due to the overwhelming negative reception of The Lord of the Rings: Gollum, the developer Daedalic Entertainment has decided to halt all its development projects and shift its focus entirely to game publishing. This decision also affects another Lord of the Rings game that was under development since 2022. On the other hand, the development work on the survival simulation game Surviving Deponia, which was originally being co-developed with AtomicTorch, has also been halted on Daedalic's side. Consequently, the project will now be handed over to AtomicTorch.

Daedalic Entertainment stated that the decision to halt game development was a challenging turning point but also a new beginning. Although 25 out of the 90 employees were laid off after making this decision, the company will support them in finding new opportunities.