Hytale: Riot funded it 10 years, then cancelled and closed the studio

Hytale began in 2015 as a passion project by Hypixel, the team behind Minecraft's most popular server network. The December 2018 trailer went viral — 35 million views in a month — and attracted Riot Games, which invested 'several million dollars' and fully acquired Hypixel Studios in April 2020. Before the buyout, the studio was spending up to $400,000 per month on development.

The project's scope kept expanding: a block-based sandbox, an RPG, a creative toolkit, and a modding platform all at once. By mid-2025, the game had been in development for ten years with no release date in sight. On June 23, 2025, Riot cancelled Hytale, citing an 'overly ambitious scope,' and shut Hypixel Studios down.

Five months later, co-founder Simon Collins-Laflamme reacquired the project from Riot on November 17, 2025. He rehired 30 developers and resumed work under the Hypixel Studios name, releasing Hytale in early access on January 13, 2026. Riot's decade of investment — at $400K/month for years before the acquisition, plus the buyout price and five years of Riot-funded development — was abandoned.

Riot funded Hytale for a decade at $400K+/month, then cancelled it; the founder bought it back, rehired 30, and shipped early access in 2026.

The scope was never bounded: a sandbox, an RPG, a creative toolkit and a modding platform all at once meant no single milestone could declare it done — ten years in, there was still no release date.

Riot acquired the studio on a viral trailer, not a shipping plan; the $400K/month burn rate scaled up under Riot's ownership without any commensurate narrowing of scope.

The cancellation came after a decade — long enough for Riot's own standards to shift multiple times, so a project that looked strategic in 2020 looked like a money pit by 2025.

A decade without a ship date is a scope problem — Hytale's ambition was the reason Riot invested and the reason it cancelled, and nobody narrowed it while there was still time.

The reacquisition by Collins-Laflamme and the early-access release in January 2026 proved the game was buildable — just not at the scope Riot was willing to fund. Riot's investment became a case study in how a viral trailer can launch a project that no studio discipline can finish.