Frostpunk 2 developer and publisher 11 bit studios has laid off an unknown number of staff and canceled an upcoming project previously codenamed Project 8.
In a message to investors, the studio confirms that its management has "resolved to discontinue the development of the game codenamed Project 8", and that this discontinuation will result in a loss of around 48.4 million Polish zloty (that's about $11 million).
Board president Przemysław Marszał says that Project 8 was "conceived under very different conditions" for the industry, during a time when "narrative-driven, story-rich games held stronger appeal".

He says that after an assessment of Project 8's progress, management found "unresolved issues and challenges that would require further extensions of the production timeline and corresponding budget increases to address".
Together with what Marszał calls "revised sales forecasts, largely reflecting the changing market environment", caused management to harbor "significant doubts" about Project 8's "overall profitability", hence its cancellation.
Shutting down Project 8 will also result in layoffs, Marszał and 11 bit say. The studio doesn't disclose exactly how many employees' jobs are on the line, but Marszał does say that "more than half" of Project 8's 37 developers will be offered opportunities to work elsewhere within 11 bit.
In closing, Marszał says that despite this setback, 11 bit has what he calls a "clear and well-defined roadmap" for its future projects, including the continuation of work on Frostpunk 2 and the release of upcoming sci-fi adventure The Alters.

11 bit's cancellation of Project 8 comes just a few months after the launch of city-builder Frostpunk 2, whose success appears to be somewhat disputed.
The studio itself said that the game was already profitable just a few days after launch, but shares in the company plummeted after Frostpunk 2's release, with an analyst saying the game's Steam player peak was "a negative surprise" compared to expectations.