Postal Spinoff Canceled After AI-Use Allegations

Running With Scissors (RWS) has canceled Postal Bullet Paradise, a newly announced entry in the long-running Postal franchise, just two days after unveiling it. Following a heated online controversy over alleged use of generative-AI art, the developer behind the project, Goonswarm Games, announced it was shutting down altogether after the cancellation. 

The “bullet heaven” spinoff trailer was revealed on Dec 3. It immediately ignited criticism on X, Reddit, and Discord, where users accused the developer of using AI-generated art; claims the studio repeatedly denied. The new title was positioned as an arcade-style twist on the Postal brand, which originally debuted in 1997 and, despite frequent controversy, remains one of the most enduring cult shooters in gaming history.

Postal: Bullet Paradise was cancelled in the development phase, making the shutdown one of the quickest and most visible AI-related disputes to hit the games sector so far.

The publisher said the situation had caused irreparable damage to trust between itself and Goonswarm, prompting permanent cancellation of the game. As criticism escalated, Goonswarm publicly announced its closure, stating that harassment and false allegations made development impossible.

Gen-AI Controversy Prompted the Shutdown

The backlash began almost immediately after the game’s announcement. Users shared screenshots across X and Discord, claiming that character portraits showed tell-tale AI patterns and compositing artefacts. RWS’ official Discord reportedly saw a heated back-and-forth between critics and studio representatives.

Initially, the publisher supported Goonswarm. The co-owner, Mike Lee, called a user, “retard” for alleging that the game had AI art. Goonswarm attempted to counter the allegations by publishing layered PSD files and work-in-progress files as proof that the art was drawn by human contractors using standard tools. Goonswarm claimed, “No generative AI was used for the reveal trailer or for the game,” in a statement to PCGamesN. However, some allegations claim that the visuals were created by tracing over existing art.

The turning point arrived when Running With Scissors posted a formal cancellation notice on X, stating that “trust in the development team is broken,” and apologizing for the controversy surrounding the reveal. In that post, the company said the decision was based on reputational harm and the negative effect of the dispute on the Postal brand. 

Shortly after, Goonswarm Games confirmed its shutdown, saying, “Our project, and everything we built for the past six years was cancelled in just a few days.” The cancellation post again highlighted how human creators worked hard for the game “only to face false Al accusations.”

The collapse of Postal Bullet Paradise adds a new point to the ongoing debate over generative AI tools in game development. While Goonswarm insists it used no AI, the speed of the backlash and the speed with which the publisher reversed its position illustrate a volatile environment in which perception may carry more weight.

The incident shows how AI controversy now poses not only ethical questions but real operational risk, a dissolved studio, a canceled game, and a decades-old franchise forced to distance itself due to controversy.