What happens when a secretive blockchain company buys your game studio

Secrecy runs rampant in the game industry, with everything from game projects to hiring decisions kept lock and key under tight NDAs. But what if a company was so secretive you didn’t even know you were applying to work at it when you sent in your application?

That’s a scenario one former worker at Phoenix Labs, the studio behind Fae Farm and Dauntless, found themselves in last year. When they asked for information about the studio’s parent company during the recruiting process, they were told it was a secret. Only after signing their paperwork did they learn the company had been purchased by blockchain firm Forte Labs.

This developer told us they didn't know at the time this secrecy was a "giant red flag."

Sometime in 2023, Forte Labs bought Phoenix Labs after it became independent from Garena Games (itself a subsidiary of Sea Ltd). According to five former workers who spoke to Game Developer (all requested anonymity to speak freely, given they had signed non-disclosure agreements as part of their severance packages), everyone at the studio was barred from revealing news of the purchase to anyone outside the company.

Forte Labs says this was not a rule it implemented. A PR spokesperson for the company told Game Developer that "the acquisition was not announced, but I don't think there was a formal policy around disclosure."

Related:Ex-Phoenix Labs devs reveal now scrapped 'Project Dragon' game

That's strange enough. What's stranger is Phoenix Labs wasn't the only company Forte owned and reportedly demand be kept secret. After the aforementioned developers were laid off in May 2024, they were surprised to learn they weren't the company's only game studio. At the time of the layoffs, they had been sibling organizations with mobile game studio Rumble Games.

A former employee of Rumble Games (who also requested anonymity) confirmed to Game Developer that they and their colleagues had been also sworn to secrecy about their new owner when Forte purchased the company in March of 2024. They'd been aware Forte had been funding development of their in-progress game Towers and Titans, but were surprised to learn the company had bought them outright.

Then, in July, Forte shut down the entire studio.

Nothing about Forte's apparent decision to hide its acquisitions seems illegal or untoward. But former employees and industry experts we spoke with agreed that enforcing said secrecy while never announcing the news was highly unusual.

The former workers at both companies said they've been comparing notes with their peers, trying to answer the same question: why did Forte Labs not want anyone to know it had purchased these game studios?

Forte Labs was Zynga's partner in entering the blockchain space

Founded in 2019 by Kabam founder Kevin Chou, and former GarageGames CEO and CTO Josh Williams, Forte Labs previously billed itself to potential partners as a kind of interchange between different blockchain-based game markets so developers could integrate blockchain tech in their games. Today its website states it is a "compliance solution" for blockchain projects.

It's made several public investments and fundraising rounds related to that venture, most recently joining in on a seed funding round of Web3 marketing platform MadMenAI, run by Sesame Labs.

It made waves in 2021 when Farmville and Mafia Wars developer Zynga announced it was teaming up with the company to create blockchain-based games that were "fun and enduring." Zynga eventually unveiled the game Sugartown as part of that partnership.

That partnership appeared to come to an end in September 2024, when former Zynga web3 executives Matt Wolf and Tommy Ngo left the publisher to form D20 Labs, which will now continue Sugartown's development. It's unclear if Forte is affiliated with the new studio. A representative for D20 Labs declined to answer our questions when we reached out.

Several job postings for blockchain firm Windranger Labs state Forte Labs was part of a $500 million "contribution" to Game7, an "autonomous GameFi institution" operated by Windranger Labs. Forte's spokesperson confirmed to Game Developer that it, along with BitDAO and other investors, "formed" Game7 in 2021. "This funding was connected to the commitment to expand ecosystem partners and incubate healthy and sustainable projects, powered by Forte technology," they said.

Elsewhere it's been part of multi-million dollar fundraising efforts alongside Solana Ventures and Griffin Gaming.

Behind the scenes, the company was quietly funding and purchasing game studios, with the apparent intent of producing games it could integrate on its own blockchain platform.

How many is unclear. When asked what game studios it has purchased, Forte's spokesperson confirmed its purchases of Rumble Games and Phoenix Labs, but said the company "hasn't been announcing investments and partnerships for some time now, but more news will be coming from Forte soon."

This secrecy does not appear to break any laws. KUSK Law partner Don McGowan, former general counsel at Bungie and chief legal officer at The Pokémon Company, told Game Developer that there's nothing illegal about keeping these purchases a secret, but that it is "fucking weird."

"Think about it in the context of a public company: the owners of the shares of the company are rarely known to the employees," he explained. "This is kind of like that."

In 2022 Forte struck a deal with Australian gambling machine manufacturer Aristocrat Leisure. Aristocrat is the parent company of mobile game publisher Plarium, which had acquired Alliance: Heroes of the Spire developer Rumble Games in 2017. Forte pitched Aristocrat on funding Rumble Games' next title Towers and Titans. In exchange for the funding, Forte would have exclusive rights to host the game on its own blockchain.

Towers and Titans was set to be a "player-first" NFT game. Players would assemble teams of fantasy characters called "Titans" that could be bought and sold on the blockchain. These Titans would be used in tower defense scenarios against PvE enemies and other players.

Forte’s relationship with Rumble Games was tumultuous from the jump. The former Rumble Games employee we spoke with said what followed was a "shitshow." Though Forte was footing the bill, it apparently gave little input on the game’s development, leaving workers unsure what their new funding partner expected of them.

This former employee said most employees never spoke with anyone from Forte, and the little feedback the company offered had to do with ensuring regulatory compliance in the game and in affiliated communications.

All the while, Rumble employees were allegedly barred from disclosing Forte's investment in the game…or from reaching out to Forte themselves. Questions about Forte's needs went unanswered. Many would only meet a Forte employee when they were laid off in the 2024 studio closure.

Forte bought Phoenix Labs in 2023—but few employees knew about it

While Rumble Games moved on with Towers and Titans development, Forte turned its gaze elsewhere to Dauntless and Fae Farm developer Phoenix Labs.

At some point in early 2023, Garena Games divested from Phoenix Labs and Forte Labs became its new owner later in the year. The timeline is unclear because Phoenix Labs employees don't recall being told exactly when the transition took place.

At first, then-CEO Jesse Houston referred to Forte as being an "investor" in the company, but after he left the studio, employees realized it was their new owner.

As with Rumble Games, employees were again reportedly prohibited from publicly stating that Forte had bought the company. Sources from both companies did not remember signing an NDA specifically barring this, but that they received repeated verbal instructions to keep this information a secret. The former Phoenix Labs developer who joined the company after the acquisition indicated it was considered "confidential information" they were barred from disclosing in the company's standard NDA.

One former senior employee told Game Developer the first they were told of the impending acquisition was in January 2023. A developer who was employed with the studio before the acquisition and was laid off in 2024 said they only learned they'd been acquired after hearing it from their team lead. Another employed for a similar length of time told Game Developer they only learned it had purchased the studio after being laid off.

At both Rumble Games and Phoenix Labs, the lack of transparency over Forte's ownership seeped into day-to-day life. Three of the former Phoenix Labs employees we spoke with told Game Developer that updates from Forte were the talk of gossip in meetings, but rarely came with formal announcements.

Phoenix Labs workers had slightly more contact with their parent company than workers at Rumble Games. This was in the form of interim CEO Neil Young, a longtime game industry executive who had founded N3twork, a blockchain company bought by Forte in 2022.

The two veteran developers we spoke with didn't voice any major complaints about Young, with one saying he was "outwardly supportive." But they said he didn't seem to share the creative values of the studio. One of these former employees remembered him saying Phoenix Labs was on track to be "front of market of an age of abundance," apparently in reference to Forte's mission of making blockchain-friendly games.

Phoenix Labs and Rumble Games were in different positions regarding how fast they were supposed to be implementing blockchain technology in their games. Developers at Rumble were working on a fully-functional blockchain marketplace that would let players buy and sell in-game items listed using cryptocurrency. The former senior Phoenix Labs developer told us Forte solicited pitches from the studio on how to use blockchain technology in its games, but that it was never "prescriptive" with its approach.

This individual said they weren’t bothered by "downplaying" the ownership, saying they believed Phoenix Labs would not "do itself any favors" by acknowledging being owned by a crypto-affiliated company.

Despite the freer hand, there was still nervousness about any effort to use blockchain in Phoenix Labs' existing games. Fae Farm and the planned Early Access game operating under the title "Project Dragon" (a multiplayer sandbox-RPG inspired by Minecraft and The Legend of Zelda: Breath of the Wild) were both conceived as being partly aimed at younger audiences, and employees were uncomfortable with hawking digital items with speculative value to children and teenagers.

Image via Phoenix Labs.

Life at Phoenix Labs reportedly deteriorated after Young "vanished" from the company in early 2024. At this point, both the newer hire and tenured developers we spoke with said Phoenix Labs felt like it was turned into a series of smaller game studios barely supported by Forte.

Company-wide town halls known as "lab reports" were cancelled. Developers lost visibility on other teams' projects. Morale took a major hit. "We saw less of that message of unity we were used to," one of the veteran workers told us, adding that it seemed the company's core values were "relevant in times [of plenty], but vanished in times of hardship."

Forte's spokesperson informed us that the lab reports were ended after "some leadership change." "Processes often shift with leaders," they added.

The fate of both studios took a turn in early 2024. In March, Forte acquired Rumble Games from Aristocrat Leisure, kicking off four months of tumult where employees didn't understand who was paying them or where their benefits came from. Employees were first told of the purchase in April, when they received notices saying they were "terminated" by Aristocrat, and that Forte was now their owner. The former employee we spoke with said they never signed a new contract or received an employee handbook from Forte.

While this acquisition took place, Forte told developers on various in-development games at Phoenix Labs that they were pulling financial support from those projects. Forte told some, like those working on Project Dragon, they could continue development if they secured new funding from outside the company. They had a three-month runway to find a partner. Project Dragon's leads were tasked with seeking out the funding themselves, instead of a business development representative operating on behalf of the studio.

Workers on Project Dragon were optimistic because the game was in great shape and months away from its Early Access launch. But then Forte changed course, laying the entire team off in mid-May, two months before their runway was supposed to run out. Lead developers on Project Dragon convinced Forte to let them continue to pitch the game to publishers.

Again, they seemed close to pulling off a deal—but then Forte shut down the servers hosting builds of the game around August 2024. It seemed to have a "heavy hand" in the whole process, with workers saying Forte wanted blockchain technology to be integrated into the game.

Forte's PR spokesperson told Game Developer that the company is "not currently seeking new partners or funding on paused projects; but Phoenix is currently operating its live games."

Employees were given permission to share some of their work on Project Dragon on social media, a rare boon for developers on cancelled games, who often see much of their work locked away forever behind closed doors.

Rumble Games developers wouldn't be given the same offer when it was shut down in July, a fact that still pains former employees to this day.

Game Developer asked Forte's PR spokesperson why it decided to close Rumble Games. "They can't go into detail so as not to pre-empt upcoming strategy and product announcements, but the studio's projects did not ultimately align with the company's direction," they responded.

Why is Forte Labs being so secretive?

The circumstances around Forte Labs' ownership of Phoenix Labs and Rumble Games are highly unusual, especially with the company claiming it had no "formal policy" directing employees to keep the information a secret. All the former Phoenix Labs and Rumble Games employees expressed a range of emotions about the experience, some saying they felt "betrayed."

Three of our sources were under the impression that Forte's secrecy had to do with the negative perception of blockchain-based games and a worry that there would be "bad press" if it came out Phoenix Labs was owned by a blockchain company. No one could confirm if that was the motivating reason.

Workers who applied to positions at these companies weren't allowed to know who they'd be working for. The lack of communication with their parent company left them uncertain about their job security. Some feared that other developers would feel tempted to take Forte's money without knowing how it had run Phoenix Labs and Rumble Games.

The only reason the world knows about Forte's secret transactions is because former principal engineer Kris Morness put himself on the line and named the company in a LinkedIn post announcing his layoff. Other former Phoenix employees said they only felt comfortable coming forward after he took that step, and the former Rumble workers we spoke with said they only learned another studio shared their fate because he spoke out (Morness did not respond to a request for comment sent via LinkedIn).

Image via LinkedIn.

The strange saga of Forte Labs' studio purchases embodies many of the most hardcore capitalistic instincts of the video game industry. Tightfisted secrecy and prioritizing profits over creativity are often criticized as behaviors that hurt quality of life in this business.

"Video games as an industry needs developers, creatives, and distribution platforms, and all of us have to treat each other fairly for this to work," the former Rumble Games employee said, when asked for their opinion of the experience. They noted it changed their thinking about unionization.

But it was one of the former Phoenix Labs workers—who worked on one of the games cancelled by Forte—that summed up why developers push through even after painful experiences like this one. They gushed over the talent and creativity of their peers, describing how team members of all disciplines collaborated in a way they hadn't seen on other projects.

They don't regret the time spent on that unreleased game. "That was still worth doing," they said. They stressed how important it is for developers to remember why they got into this business—to make games that bring joy to players, even when those at the top only seem to prioritize profits.