A Red Faction sequel was in the works at the Embracer-owned developer of Galaxy On Fire and Chorus before it was hit by layoffs, according to a new report.

Rock, Paper Shotgun reported that Fishlabs, bought by controversial video game group Embracer in 2018, was working on a sci-fi Metroidvania and had built a “visual prototype” for a brand new Red Faction game before both projects were canceled and their developers laid off in 2023.

Embracer had already shut down the original creator of the cult classic Red Faction, Volition, by the time Fishlabs put together its Red Faction pitch. According to RPS, a team at Fishlabs built a “fake trailer” with Unreal Engine 5 to present to Embracer-owned publisher Plaion, with the hope of creating a game similar to 2009’s well-received Red Faction: Guerrilla.

Critics praised that game for its huge open world and, in particular, impressive destruction-based gameplay that saw players smash up buildings with a sledgehammer. A sequel, Red Faction: Armageddon, followed in 2011, but sales were poor and then-publisher THQ canceled further follow-ups. Red Faction: Guerrilla Re-Mars-tered, a remaster of Guerrilla, launched in 2019.

Unfortunately, despite the pitches to Plaion, this new Red Faction was not greenlit, and in November last year it was canceled outright. According to RPS, Fishlabs studio leadership were told to lay off almost everyone not attached to an active game project, resulting in 50 job losses. The RPS article is well worth a read if you want some insight into what it was like working at an Embracer-owned studio in 2023.

In April, Embracer announced its intent to split into three separate companies: Asmodee Group, Coffee Stain & Friends, and Middle-earth Enterprises & Friends. The move came after a brutal period of restructuring that over a thousand staff lose their jobs, multiple games canceled and studios shut down, and the sale of developers including Borderlands maker Gearbox and Star Wars Knights of the Old Republic remake maker Saber Interactive.

Embracer Group’s financial struggles began following the collapse of a $2 billion deal, reportedly with Saudi government funded company Savvy Games Group. The Swedish firm has since come under fire for the sweeping cuts that followed its ill-fated acquisition spree. In January it emerged that Embracer had canceled a new Deus Ex game that was two years in development and laid off some staff at Eidos Montreal. Most recently, Embracer shut down Pieces Interactive after the Alone in the Dark reboot flopped.

Wesley is the UK News Editor for IGN. Find him on Twitter at @wyp100. You can reach Wesley at [email protected] or confidentially at [email protected].



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