Annapurna Interactive, the publisher of Kentucky Route Zero and Stray, has collapsed. Its entire staff has quit en masse

According to the Hollywood Reporter, and Bloomberg, the videogame publisher Annapurna Interactive is functionally insolvent, with the entire senior leadership team, and over 20 employees, resigning. Annapurna Interactive's active development contracts are now in doubt after the shocking move.

Megan Ellison is the daughter of Oracle founder Larry Ellison and Megan Ellison founded Annapurna Pictures. The games division, under the guidance of industry veterans, was launched in 2016. It has been a success, publishing games such as Kentucky Route Zero, Outer Wilds and Stray.

The Hollywood Reporter broke the news first about the departure of senior executives from Annapurna including company president Nathan Gary. Gary was one of the founding industry veterans for the interactive division and, since 2021 the president of Annapurna Pictures. Gary will be replaced as president by Hector Sanchez. Sanchez is another founding member of Annapurna Interactive who recently returned after a stint with Epic.

The most interesting part of Schreier’s report is the anonymous sources Schreier cites. According to Schreier’s anonymous sources Megan Ellison had been in talks with Gary to spin off Annapurna Interactive into its own company separate from Annapurna Pictures. The resignations of Gary, his leadership, and Annapurna Interactive staff were a result of Megan Ellison's decision to pull out of the negotiations.

Megan Ellison, a spokesperson for Annapurna, confirmed to Bloomberg that negotiations had failed.

"Our top priority is to continue to support our publisher and developer partners during this transition." We're committed not only to our existing slate but also expanding our interactive space, as we continue to search for opportunities to take an integrated approach to linear interactive storytelling across film, TV, gaming, theater, and more.

This situation is causing havoc among Annapurna's dev teams. Bloomberg reports that developers are scrambling to see if their publishing agreements are still valid and viable. Aura Triolo summarized the situation on BlueSky as follows: "*currently published by Annapurna Voice* haha."

This development does not affect the recently announced partnership between Remedy, the developer of Alan Wake 2, and Annapurna Pictures for the future of the Control Series. The deal was made with the parent company Annapurna Pictures, and not with the interactive subsidiary.

Details are scarce, but the staff exodus was shocking and probably unprecedented in the industry's history. The staff at Annapurna left their jobs willingly, and without notice, during a period of mass layoffs in the games industry.