Two Years After A TenCent Investment, RiME Developer Tequila Works Has Filed For Insolvency

In an unfortunate bit of news, Spanish game company Tequila Works has filed for insolvency.

As reported by GamesIndustry.Biz, the company’s founders, Raúl Rubio and Luz Sancho; have stepped down, and Térence Mosca has been assigned as the company’s new general manager.

The studio shared this statement in light of this news:

“Since its founding in 2009, Tequila Works’ game-development philosophy has always focused on ‘creating things with gusto’.

We are doing everything we can to provide support and guidance to our teams during this difficult time.”

Tequila Works was founded in 2009, and seemed to have found a unique place for themselves in the video game industry. They are best known for making puzzle platform RiME, but they also made Deadlight and The Sexy Brutale, all multiplatform titles on PC and consoles.

In more recent years, they experimented with different platforms, releasing WonderWorlds on iOS, Groundhog Day: Like Father Like Son on VR platforms PlayStation VR, Oculus Rift, HTC Vive, and Gylt exclusively on Stadia. When Google Stadia closed down, Tequila did opt to port Gylt over to PC and consoles afterwards.

Most recently, they successfully released Song of Nunu: A League of Legends Story under the Riot Forge label, months before Riot Games closed that label down too. We reported two years ago that they received an investment from TenCent for an undisclosed sum. While we reported that as an acquisition by the conglomerate, it certainly seems now that that couldn’t protect them from today’s events. We can’t discount the possibility that TenCent themselves called to declare insolvency, as we’ll explain below.

We don’t know the details behind these insolvency proceedings, but it’s worth discussing that this move comes in light of newly enacted insolvency laws in their mother country Spain.

Consultancy firm Alvarez and Marsal explained in this blog post on their website that the new laws make it possible for insolvency to lead to restructuring, thereby saving these insolvent businesses. Prior to these reforms, declaring insolvency would automatically mean that the business would simply be closed.

The new laws would also allow investors like TenCent to intervene over Tequila Works’ current management, and essentially make them recognize the need to restructure and go through it. Once again, this would ultimately be to help salvage the company.

Tequila Works already had some layoffs last month, so this intervention may have really been necessary. We wish the best for the exiting members of this studio, but we will note that this is not a situation where the public can complain that management seems to be unaccountable for their own mistakes.

If it’s still possible to salvage Tequila Works somehow, we hope that Mosca and the remaining staff can find a way to make it work. We also hope those who have to leave the company find placement back in the video game industry. And we fervently hope that this string of layoffs, bankruptcies and closures in this industry is nearly at an end.