German outlet Game Two is reporting on allegations of a toxic work culture at Daedalic Entertainment, specifically surrounding Lord of the Rings: Gollum. Nearly three dozen past and present employees claim the project suffered from the alleged environment and mismanagement at the studio.
Billed as a triple-A game (the franchise’s first since Monolith’s Middle-earth: Shadow duology), Game Two’s video claims the project was budgeted at the considerably low price of €15 million (or $15.9 million). Daedalic made attempts to get more funding, but those efforts were unsuccessful.
The toxicity allegedly came from CEO (and founder) Carsten Fichtelmann and COO Stephan Harms. Employees claimed the studio had an “atmosphere of fear” which stemmed from the pair’s presence: Fichtelmann would shout at staff, and things were so hostile that some workers would whisper out of fear of being overheard.
The video further alleges staff had to crunch without pay, and that junior staff and interns faced the most pressure during development. Some employees noted they were essentially “cheap labor” that “couldn’t assess the level of stress as critical or unusual.”
Eventually, Daedalic elected to focus on “damage limitation” for Gollum. The game’s ballooning scope and lack of proper resources made it so that staff could only do what they could and fix things later via updates and patches.
Gollum’s failure continues to hang over Daedalic
Lord of the Rings: Gollum released in May and was met with a largely negative reception. Weeks later, Daedalic laid off 25 employees (out of a staff that was reportedly 90 before that point) and canceled a second Lord of the Rings project that was believed to be a Gollum follow-up.
Regarding the game’s woes, Daedalic revealed the larger Lord of the Rings license was “time-limited,” which may have further exacerbated things. In the time the studio was likely working on the game, Embracer had bought up the entire Lord of the Rings rights so it could make new games and movies.
Notably, Daedalic released a public statement apologizing for Gollum’s release state. Game Two claims that apology was written by parent company Nacon without approval from staff. Anonymous sources also claimed it was written using the ChatGPT AI tool.
Sources speaking to IGN corroborated Game Two’s reporting, calling Daedalic’s culture an open secret in the German game industry. For their parts, both Daedalic and Nacon denied the allegations of Harms and Fichtelmann’s behavior in Game Two’s video, saying it has a “friendly working atmosphere.”