Blizzard Co-Founder Mike Morhaime’s New Studio Faces Struggles

Blizzard co-founder Mike Morhaime walked away from Blizzard Entertainment in 2018 to start his new game development studio Dreamhaven, which promised to combine creative independence with Blizzard’s quality. For many in the industry, Morhaime’s comeback carried the weight of high expectations. But nearly five years on, his studio is struggling in the industry. 

Dreamhaven’s Games Reportedly Undersold in 2025

Dreamhaven released the role-playing game Sunderfolk earlier this year, followed by Wildgate, a multiplayer shooter, in July. The games scored 79 and 72, respectively, on review aggregation website Metacritic. According to a letter from Morhaime to staff that was obtained by Bloomberg News, Sunderfolk sold around 62,000 units since its April release, while Wildgate moved 130,000 copies in its first month. The results fell short of projections, leaving the company with expenses that are outpacing revenue. 

Dreamhaven’s struggles are part of a wider pattern affecting independent game studios founded by veterans of large publishers. Frost Giant Studios, another developer created by Blizzard alumni, is also experiencing weak sales for its strategy title Stormgate. The company disclosed in regulatory filings that early access revenue could not cover its operational costs, with losses of more than $11 million last year. Chief executive Tim Morten acknowledged that the challenge of reaching players has intensified as entertainment habits diversify. 

Bloomberg attributed the struggles of newer games to the dominance of “forever games” such as Fortnite, League of Legends, and Counter-Strike 2, which retain players through constant updates and community-driven ecosystems. These long-running franchises make it difficult for new multiplayer titles to build lasting audiences. The slowdown in venture capital adds further pressure. After a surge of investment during the pandemic, funding for new studios has dropped significantly, according to data from PitchBook, leaving developers with fewer safety nets when launches disappoint.

Despite the hurdles, Morhaime insists that Dreamhaven’s work has only just begun. He recently lowered the price of Wildgate on Steam to entice more players and said the company remains focused on listening to its community.