Crystal Dynamics Might Take On Middle-Earth With $100M LOTR Game

Crystal Dynamics, the studio behind the Tomb Raider franchise, is reportedly developing a new Lord of the Rings (LOTR) game, according to an exclusive report by Insider Gaming. The project is expected to run under the Swedish gaming conglomerate Embracer Group, which controls Middle-earth Enterprises and its associated IP rights.

Reports about a new LOTR video game started circulating back in October 2025, with news of Embracer, Revenge, and other parties being involved in the development. However, no studio has thus far formally confirmed development.

Insider Gaming reports the game has been in development for some time, and is backed by a reported $100 million USD investment from Saudi Arabia’s Abu Dhabi Investment Office (ADIO). The new LOTR game is designed to “compete with Hogwarts Legacy,” which could mean it will potentially get a similar open-world setting.

The Hogwarts Legacy comparison carries commercial weight and a significant bet on the LOTR IP, after the recent titles’ mixed performance. Hogwarts Legacy sold over 12M copies in its first two weeks, surpassing $1B in total revenue by May 2023.

Crystal Dynamics Involvement and the Current State of the Upcoming LOTR Game

Only Embracer and Revenge’s names were associated with the projects in the 2025 report. Recently, on March 31, a report claimed that Warhorse Studios is involved in the ADIO-backed LOTR title. Later, Insider Gaming claimed that the LOTR game, which is reportedly being developed at Warhorse Studios, may not be the same one as Crystal Dynamics’.

No release window has been confirmed, and sources quoted in the report indicated the game is still “a bit away.” That timeline is complicated further by Crystal Dynamics' existing workload. The studio is currently working on Tomb Raider: Legacy of Atlantis (2026) and Tomb Raider: Catalyst (2027).

If true, the Crystal Dynamics’ LOTR project reflects two converging industry trends, rising Saudi investment in game development and increasing reliance on globally recognized IP. 

Saudi Arabia has increased its presence in gaming and esports through strategic alliances and sovereign-backed funds, aligning with the state's Vision 2030. Billions have previously been invested in international gaming assets and esports circuits by Saudi Arabia's Savvy Games Group, PIF, and related efforts.