A castle made of cards with the Mighty Kingdom logo on one side and suits on the other. A hand approaches the castle out of the ether
Zooey Liao/CNET

Australia's Biggest Independent Game Studio Is Teetering on the Edge of Ruin

Allegations of fraud, a plummeting stock price and poor game sales have pushed Mighty Kingdom to the brink.

In the bustling heart of Adelaide, South Australia, stands a castle made of glass. Depending on the angle, you might catch sunlight sparkling off the exterior. But when the sky darkens with storm clouds, the same glass projects a heavy gloom over the street below. 

Within the walls of this castle lies Australia's largest independent games studio: Mighty Kingdom. 

From humble beginnings in 2010, Mighty Kingdom has grown to employ an army of over 160 game developers, artists, engineers and designers. The company is seen as a major success story, championing talent in Australia, building a successful graduate intake program and working alongside many of the world's biggest brands, including Lego and Disney. It has been praised by all corners of the gaming community, applauded for its diverse hiring policy, four-day work week and mental health support. 

In short, Mighty Kingdom has had a fairy tale run and more than lived up to its impressive name. 

But behind the scenes, there's been a growing turmoil. In April 2021, in an attempt to cement its success and take advantage of the pandemic-induced video game boom, Mighty Kingdom listed on Australia's stock exchange, the ASX. Since then, it's struggled with development delays, slow game sales and increasing staff expenses.

Its first major console title, Conan Chop Chop, sold poorly upon release in March. After raising an impressive $12.7 million ($18 million AUD) at 18 cents (26c AUD) per share when it first listed on the ASX, Mighty Kingdom has seen its stock price tumble as investors grow concerned. In June, it hit an all-time low of just 2.1 cents (3c AUD). Its recent quarterly reports paint a worrisome picture of a company propped up by government subsidies and tax rebates, burning through cash at an unsustainable rate. 

More seriously, allegations of IP theft, fraud and unjust treatment have been leveled against Mighty Kingdom by creatives who worked with the studio to help build and publish their video games over the last five years.

In an industry where huge game development studios like Activision Blizzard and Riot Games stand accused of fostering a culture of sexual harassment and discrimination, Mighty Kingdom had become an example of what game development should look like. But over the past six months, CNET has investigated allegations against the studio, uncovering a trail of broken promises, deception and unmet expectations and revealing a messy dispute over IP, entangling the studio and the state government of South Australia. 

The Kingdom is under siege, and the bombardment threatens to undo a decade of positive change. 

Mighty Beginnings

Mighty Kingdom was built from the ground up by Philip Mayes, a New Zealand-born IT professional who honed his craft at Australian game studios prior to the 2008 global financial crisis. 

Mayes co-founded Mighty Kingdom in 2011 with Jindou Lee, just as Apple and Google's online app stores began to boom. In 2013, he shifted the focus of Mighty Kingdom to work solely on game development. Four years later, the studio had secured licensing agreements with Disney and Lego and joined forces with Australian toy company Moose Toys to build a portfolio of games focused on Moose's range of "Shopkins" collectibles. Shopkins has been one of the studio's biggest successes, attracting over 40 million downloads.

These triumphs saw the diminutive Mighty Kingdom transform into a juggernaut in the Australian games industry. You don't have to look far to find glowing stories about the studio's mighty rise. In May, the Australian Government's Trade and Investment Commission published a press release about the company's ambitions to expand into a global entertainment giant — a studio on par with Ubisoft or Activision Blizzard. To get there, Mighty Kingdom recognizes that it needs people.

"We're an industry where the amount of product we can create is determined by how many people we have," Mayes told Byteside in 2020. The studio has long understood its most important asset is its staff. And Mayes, as CEO, has promoted an aggressive growth strategy, fostering a work environment and employee benefits scheme that receives endless positive press.

"Mighty Kingdom's working conditions are better than a lot of Australian studios," said Tim Colwill, convenor of Game Workers Australia, a trade union for employees in the video game industry. "Our members there are generally happier and more well-compensated."

Coupled with options to work remotely and the company's strong diversity and inclusion policies, Mighty Kingdom is one of the premier destinations in Australia for up-and-coming developers and artists. The stats back it up: Last year's graduate intake program had 219 applicants for the six 12-month contracts on offer. The program has been so successful that Australia's Interactive Games & Entertainment Association worked with Mighty Kingdom to develop guidelines for other studios.

Though the studio has been held up as an example of excellence, problems have been bubbling away under the surface. For years, Mighty Kingdom has been embroiled in a bitter, complicated dispute with an inventor that approached the studio with his dream game idea in 2017.

Lego Heartlake Rush is an endless runner Mighty Kingdom developed for Lego.

Lego/Mighty Kingdom

Mighty Pets

Justin Daley believed he had a hit on his hands. He called it the Schnuzzle.

Daley, who said he's been an inventor all his life, came up with an idea for a dog toy after diving headfirst into the world of pets. He did his market research and found people spent more money on their dogs than on themselves. The Schnuzzle, he reasoned, was perfectly placed to fill a hole in the market.

It was a chew toy focused on entertaining dogs by exciting their keen sense of smell. After spending $100,000 on prototyping the Schnuzzle, he launched a Kickstarter campaign for an additional $75,000. Despite being a Kickstarter staff pick, the Schnuzzle failed to reach its funding goal. Still, Daley persevered with the prototype. As the Schnuzzle was going through product testing, his mind began wandering, trying to think of the next big idea. He landed on the other side of the pet market. Cats.

"All the cat people are on the internet," he said. "The unofficial mascot of the internet is the cat."

This was the mid-2010s, when celebrity cats were all the rage. Daley's idea: Build a video game that allows players to collect, watch and pet different breeds of cat. He'd previously approached Mighty Kingdom to help build an app called Pet Play to bolster his Schnuzzle ambitions, a process which he said he "loved."

"Budget was good, they delivered on time, I had no problem with it at all," Daley said. "I really enjoyed hanging out with the studio and we got along like a house on fire." 

He decided to continue that relationship, paying Mighty Kingdom $80,000 to build a prototype of a his cat-collecting video game. He called it Kitty Keeper. 

the kitty keeper logo, with four breeds of cat positioned above the letters

Kitty Keeper aimed to capitalize on the celebrity cat craze.

Justin Daley

In 2016, he took the prototype to the US and showed it to celebrity cat owners, forming partnerships with them to bring avatars of famous pets, like Lil Bub, into the game. Listening to Daley speak about his plans for Kitty Keeper, it's clear he had his sights set on the franchise exploding. He'd planned out movies and written TV series and even devised a way to get a player's cats, collected in-game, to be 3D printed and sent to the player's home address. By the end of 2016, he'd returned from his "super successful" trip to the US ready to go full steam ahead with Kitty Keeper. 

Daley invested an additional $300,000 into building the game with Mighty Kingdom, creating a Minimum Viable Product, or MVP. During this process, all of the rights to the Kitty Keeper IP sat with Daley, according to a Non-Binding Term Sheet seen by CNET.

Those rights would, in less than three years, come to be at the heart of the dispute between Daley and Mighty Kingdom.

Not long after Daley had returned from the US, the South Australian government, in an effort to bring jobs into the state, announced the creation of the Future Jobs Fund, which would offer local businesses the chance to share in $50 million in grant funding. Applications opened in June 2017 and closed in September of the same year.

It was a chance for Mighty Kingdom to supercharge its growth. 

"We put in a big application," Dan Thorsland, then general manager of Mighty Kingdom, told me in May. "We spent tens of thousands of dollars with a consultancy, making sure all the numbers were right." Thorsland wouldn't say how much Mighty Kingdom was asking for, but publicly available reports suggest the company asked for $5 million in funding.

The application failed. It rankled Mighty Kingdom and Thorsland, who then appeared in the local newspaper with a disapproving look on his face, dressed in a gray hoodie pulled down over his forehead. In the piece he accused the state government of overlooking the technology sector. He later learned that $1.2 million in funding had been granted to a South Australian company to buy back the production license for a chocolate bar, the Violet Crumble. That rankled Thorsland more.

Thorsland said he went into a meeting with the Department of Innovation and Skills, responsible for dishing out the grants, and laid a Violet Crumble on the table. He pointed to it. "Are you fucking kidding me?" he asked. "Are you fucking kidding me?" he repeated. It's hard to understand the importance of this chocolate bar to South Australians without having lived there, but the DIS told Thorsland there was "politics involved" in buying back the brand from Swiss confectionery giant, Nestle.

Whatever the case, Thorsland's gambit worked. The DIS team told him if Mighty Kingdom had a suitable South Australian IP, they could "cut a deal."

Mighty Kingdom had just the IP: Kitty Keeper, the game they'd been helping Daley build. The deal was on. Mighty Kingdom received a $480,000 grant from the South Australian government in March 2018 to "assist with the completion, marketing and regular content updates of the Kitty Keeper game including the creation of 16 full-time equivalent jobs based in South Australia." 

Daley's dog days were over and his cat-collecting game looked set to soar. Thorsland was quoted in the local paper calling it "the next big hit." 

It wasn't to be.

Mighty Failure

By the time the $480,000 came in, Kitty Keeper was just a few weeks away from launch. In March 2018, Mighty Kingdom published the game on the App Store for the first time, initially only in the Philippines. The soft launch gave the development team time to iron out kinks, fix bugs and monitor how users were interacting with the game. Three months later, on June 28, the game rolled out across the world. 

Kitty Keeper seemed primed for success. Daley speaks of how well the game was doing after launch. 

"In the reviews, people are loving it," he said. It's something Thorsland acknowledged, too. "It had extraordinary ratings on the App Store," he recalled. "Apple featured it over and over and over and over again." 

The game's quarterly reports paint a less rosy picture. As a free-to-play game, Kitty Keeper was built to make money from microtransactions and ad revenue. Players could buy themed cats tied to events across a calendar year or kit out the house the felines occupied. The first quarterly report shows the game made just over $4,000 ($6,000 AUD) in its first three months. This pales in comparison to the amount spent to develop the game in the same quarter: $151,000 ($221,411 AUD), according to Mighty Kingdom's report. "It just didn't turn over cash," Thorsland said. 

New users weren't coming in as quickly as the team had hoped. Daley believes the game wasn't given the attention it deserved or, more accurately, the attention Mighty Kingdom claimed it would receive. 

a bespectacled man with a beard and circular glasses holds a 3D printed model of a stylized, animated cat

Justin Daley with Jude, Kitty Keeper's mascot.

Justin Daley

He said the development team and Mighty Kingdom executives promised a lot, but delivered little. In product roadmaps for Kitty Keeper obtained by CNET, it's clear Mighty Kingdom planned a slate of updates and stability fixes throughout 2019, focusing on acquiring new users.

One of the larger updates, known internally as "Kitty Adventures," was designed to bring additional features into his game and provide players with more social gameplay. It was scheduled to launch in early 2019 and, based on various KPIs, the game would then push into the Chinese market, where data suggested users were clamoring for this sort of game. 

But the update was never released, and the game never made it to China. By mid-2019, Kitty Keeper's social media accounts were all but silent. Between May and January 2020, only five posts in total were made to both Instagram and Facebook. Marketing was non-existent, according to Daley. Outwardly, it seemed like Mighty Kingdom had given up on the cat collector.

In June 2020, when the contract to publish the game was terminated, Mighty Kingdom quietly pulled it from the App Store. 

Mighty Missteps

The erasure of Kitty Keeper hides a messy truth about the journey of the game from potential world-beater to forgettable money sink. 

It starts with the $480,000 grant awarded to Mighty Kingdom by the SA government.

There are two key points. The first: Mighty Kingdom didn't win a Future Jobs Fund grant during the first proposal round. Money was only awarded once Thorsland went to the media, which seemed to spook the government. The government backflipped and discussions between Mighty Kingdom and the DIS commenced.

In emails obtained under Freedom of Information Act requests, Thorsland and Lou Jansen, the financial adviser at the DIS, discuss how the grant should be constructed and what conditions it should meet. This isn't unheard of, but other members of parliament told CNET it's a little unusual. 

CNET has seen a copy of the grant agreement, which is publicly available under FOI. The purpose of the grant is listed as "to assist with the completion, marketing and regular content updates of the Kitty Keeper game including the creation of 16 full time equivalent jobs based in South Australia." 

Mighty Kingdom did comply with these obligations — Kitty Keeper was released and the company hired 16 more staff members. It also included a clause to provide regular reports to the DIS. Mighty Kingdom didn't always achieve this on time, but was given the opportunity to remedy any breaches. In an emailed statement via a spokesperson, Mayes noted that Mighty Kingdom "fully complied" with the obligations of the grant. 

But the grant may have been given under false pretenses.

Daley alleges the grant given to Mighty Kingdom was fraudulent because the company didn't own the IP for Kitty Keeper when the money was awarded. This has been a longstanding grievance for Daley. In June 2020, he lodged a complaint with the Office of the Small Business Commissioner in South Australia regarding ownership of the Kitty Keeper IP. 

The DIS — the same department that awarded the grant — took on the investigation and by September concluded that Daley's "claim of ownership of IP in the game is not clear-cut." The premier of South Australia at the time, Steven Marshall, reiterated this point in a statement to Daley on April 15, 2021. 

a bespectacled politician (steven marshall) looking the left of camera, his back is shadowed in darkness

South Australian Premier Steven Marshall wrote to Daley that ownership claims over Kitty Keeper are not clear-cut.

Kelly Barnes/Stringer/Getty

Daley has continued to pursue the claim that Mighty Kingdom didn't own the IP to Kitty Keeper and acted fraudulently, contacting several members of South Australian parliament, including Greens Party MP Tammy Franks, independent senator Frank Pangallo and Liberal MP Dennis Hood, to raise the matter with the South Australian police. It should be noted that Hood is, by Daley's own admission, a family friend. The South Australian police didn't respond to a request for comment.

"We have tried many avenues to pursue a formal investigation of this issue, to no avail," Franks told CNET. "We must finally resolve whether or not Mighty Kingdom falsely claimed control of the Kitty Keeper intellectual property to gain financial benefit from a taxpayer-funded grant."

Daley also alleges Mighty Kingdom was given funding by the SA government to engage a consultancy firm and put together the grant proposal for Future Jobs Fund money. This would be well outside the scope of the funding plan. CNET couldn't confirm these claims. Mighty Kingdom didn't respond to questions about the consultancy but didn't refute claims it was handed additional funds by the SA government.

Alone, the treatment of Daley and his claims are concerning and warrant a deeper look, but they're also not the only claims of mistreatment that have been leveled against Mighty Kingdom. Around the same time Kitty Keeper was being developed, another creative began working with the studio to help build his own game. That project would come to be plagued by similar issues of mismanagement and broken promises.

Mighty Ambitions

The origin story of Mighty Kingdom's first console title, Conan Chop Chop, begins in 2017 at Australia's Academy of Interactive Entertainment (AIE), a school for budding game developers.

Chop Chop began life as a student project influenced by classic games like the Legend of Zelda, the Binding of Isaac and Secret of Mana. A team of seven students (including lead designer Shannon Cross, lead artist Tin Le, and programmers Jack Vine and Harrison Gibbins) built the game in just five months. They called it Dungeon Chop Chop.

A logo for Dungeon Chop Chop surrounded by clouds

Dungeon Chop Chop was built in less than six months.

Slack Dragon

Le said he was excited to come onto the project after seeing Cross present "a whole bible" of ideas and could tell the designer had "put in so much effort and soul" to realize the game. Vine, who now works with accomplished Adelaide studio Team Cherry, said that even though the whole thing was thrown together very quickly, the group ended up with "a pretty complete little game."

It wasn't just complete. It had legs. At the AIE's end-of-year awards, it took out the prize for Most Impressive Advanced Diploma Game Project.

At the end of the diploma, the team disbanded. Several members moved into full-time jobs. But Gibbins and Cross, under the banner "Slack Dragon," continued to tinker with the game. They dropped it on social games website Gamejolt and popular indie marketplace itch.io on Jan. 11, 2018 and it took off, generating thousands of downloads. It even piqued the interest of overseas publishers looking to strike a deal. Gibbins recalls Texas publishing house HitCents came knocking, but the deal never got off the ground.

Then, in March 2018, Gibbins got a job with Mighty Kingdom, which he said created some tension between himself and Cross because it meant Dungeon Chop Chop would be put on the backburner. But the project didn't die.

Cross was able to pitch the game to publishing houses at a major games conference in Paris in 2018, with Mighty Kingdom in tow. There he met with Rui Casais, the CEO of publishing house Funcom, which owns the licensing rights to Conan the Barbarian. Up to that point, Conan had always been seen as a very adult and mature property, with the lead character starring in violent and bloody games like Conan Exiles and Age of Conan. 

But Casais saw something in Dungeon Chop Chop — a way to open up the Conan IP to a new audience. He suggested expanding Dungeon Chop Chop from two players to four and setting it in the barbarian's fantasy world of Hyboria. 

As it turned out, Cross was a Conan superfan who has been inspired by Conan his whole life. When Funcom gave Mighty Kingdom and Cross the greenlight to start developing a prototype using its Conan license, Cross brought in posters, statues, comic books and even VHS tapes to the studio, according to an interview Phil Mayes gave at E3 2019. He would become a major part of the project with Mighty Kingdom as the game's creative director. He told Switchaboo in 2019 that it was a dream come true. 

In just a month, Mighty Kingdom built a prototype from the ground up, using Dungeon Chop Chop as a base and Conan as its chibi-styled skin. Funcom loved it and were keen to turn it into a full game.

Conan Chop Chop was born. Then the problems began.

Chibi-style barbarians from the world of Conan the Barbarian stand atop a mound of snoow as arrows and monsters attack from all sides

Conan Chop Chop took the Conan the Barbarian license in an entirely new direction.


Mighty Mess

The early months in Conan Chop Chop's development had a real energy and buzz, according to interviews Shannon Cross gave at the time. 

But progress within Mighty Kingdom was slow. Originally, the game was to be built and completed within six months, which one person familiar with the company's operations described as "impossible" and "a super tight, unrealistic deadline." The game was announced on April Fool's Day 2019 and then shown off at the world's biggest video game trade show, E3, two months later. It was originally slated to launch on Sept. 3 before being delayed into 2020. Then it got delayed again into late 2020. Then again, into early 2021. 

Gibbins, who was working full time at Mighty Kingdom during Conan Chop Chop's development, said although he very much wanted to work on the game, Mighty Kingdom kept him on another project in the studio. He saw that the Chop Chop team — and Cross — were struggling with the same coding and design issues he had experienced programming Dungeon Chop Chop at AIE. But in total, he spent just two weeks working on the game. This lines up with allegations made by Cross, during a parliamentary hearing in February 2021, that the project was inadequately resourced and mismanaged. 

Dungeon Chop Chop in action.

Slack Dragon

As the delays piled up, Funcom became unhappy. They wanted change: a "new voice" to lead the project. That change saw Cross sacked as creative director. Funcom did not respond to requests for comment.

Mighty Kingdom agreed to continue paying Cross $7,000 a month until the game's release, the same amount the studio paid him while he was working as creative director. Mighty Kingdom then cut those payments in half, citing the pandemic as a cause, but told Cross he would still receive the full amount — it would just take longer to get to him. By June 2020, the invoices stopped being paid altogether. Cross described this as "heartbreaking."

After chasing Mighty Kingdom for the outstanding payments, Cross was told he wouldn't receive the $42,000 he was owed. Cross alleged during the February parliamentary hearing that Mighty Kingdom went to great lengths to make the process of getting his invoices paid "difficult and costly." He also called the company "dishonest, disingenuous and manipulative."

The dispute was later settled, with Cross receiving an undisclosed payout from Mighty Kingdom and cutting all ties with the company. The game Cross had helped build from scratch as a student project no longer belonged to him. Gibbins would later move on from Mighty Kingdom, though he told CNET it was an excellent place to work and he felt Mayes was always supportive.

Conan Chop Chop spent over three years in development at Mighty Kingdom, eventually releasing for consoles on March 1, 2022. According to discussions and reviews on Steam, the release featured a number of bugs. The company has rolled out two quality of life updates since release. 

In its quarterly report released in April, Mighty Kingdom said there was "significant, unexpected competition from AAA game launches," which led to sales "at the lower end of the forecast." The game received hardly any press coverage outside of niche gaming publications as the internet obsessed over Elden Ring, 2022's best-selling video game to date, released just three days prior, and Horizon: Forbidden West, a hotly anticipated title that dropped a week before that.

It's unclear where the unexpected competition came from, but it's hard to deny consumers weren't preoccupied by those two major releases. The lack of foresight, mismanagement of staff and poor resourcing that plagued Chop Chop's development had bled into its release. It's had middling returns, with independent games tracking site, SteamDB, showing a steep decline in players since March 1 and a 69.1% positive review score. Console statistics are harder to track. 

Mighty Kingdom didn't respond to questions about the unexpected competition or its alleged treatment of Cross.

Conan Chop Chop was built from scratch but it retains some of the design elements of Dungeon Chop Chop.

Funcom/Mighty Kingdom

Making video games is difficult and not everything will be a success. Kitty Keeper wasn't. Conan Chop Chop's early results seem to suggest it's headed down the same path. In both cases, the creatives who conceived these ideas felt like they were pushed out of the creative process and left in the dark, with a lack of transparency about direction, development milestones and obfuscated financials tormenting their projects.  

Even without considering the hurt caused to Daley and Cross, the two major gaming projects did not meet expectations, placing a strain on Mighty Kingdom to find its next big hit. 

To create games, you need human beings to sit down and code, to design core gameplay mechanics, to write stories and flesh out narratives and to refine how every slash of a sword feels. Mighty Kingdom's pipeline for graduates and junior staff is rightly celebrated, but its focus on rapid growth is inherently risky. If you're not delivering commercially successful video games and generating revenue, you'll quickly run into trouble because those staff have to be paid.

That's a situation the studio now finds itself in, with its precarious financials heralding an uncertain future.

Mighty Worries

Mighty Kingdom launched on the Australian Securities Exchange (ASX) in April 2021, raising $18 million from investors in an initial public offering at 30 cents per share. Since then, the stock price has crumbled, falling as much as 90%, to just 3 cents. Over the same period, its staff numbers have swelled from 110 to more than 160.

The latest quarterly trading update to the ASX in July showed that despite a 72% increase in revenue, year over year, Mighty Kingdom burned through around $1 million ($1.4 million AUD) every month, predominantly in payments to staff. With only $2.8 million ($4 million AUD) in the bank, the company appeared to have just one quarter to turn its fortunes around.

That report was released after the market closed on July 29, with the stock at 3.8 cents a share. Then, before markets re-opened on Aug. 1 after the weekend break, a trading halt was imposed as the studio attempted to raise capital. 

After the trading halt was lifted on Aug. 4, the studio announced it had appointed three new non-executive directors and secured "firm commitments" to raise an additional $5 million ($7 million AUD). As part of the restructure, Mighty Kingdom announced executive director Tony Lawrence was stepping down from the board to focus on generating revenue. The studio suggests it will achieve a break-even cash flow at the end of 2022 by "decreasing cash burn over time" and streamlining management. 

Mighty Kingdom's Shopkins games, one of the studio's biggest successes, will be removed from the App Store and Play Store on Aug. 16, 2022.

Mighty Kingdom/YouTube

It also stated that Adelaide entrepreneur, Shane Yeend, is set to take a "significant equity position" in the company. Yeend, a self-billed creative visionary, posted on his Facebook page during the trading halt that he'd "been up all night closing a deal." His post states he's trying to save 170 jobs in Adelaide and is "in for several million" but was "looking for people to share an immediate ASX opportunity."

Yeend is the CEO of Gamestar+, an interactive streaming platform where users can pay a fee to play games like Family Feud from their TV. The company is gearing up to launch its own cryptocurrency token and is "underpinned by an NFT-powered ecosystem." Mayes has previously stated Mighty Kingdom would "not look at" NFTs. A Mighty Kingdom spokesperson told CNET that "having someone of Yeend's experience will no doubt be advantageous for Mighty Kingdom as a company."

The studio didn't respond to requests for comment about whether its position on NFTs is likely to change.

CNET can reveal Kim Forrest, the studio's creative director since August 2020, is leaving the company. Forrest was one of the most experienced game designers on the Mighty Kingdom team and took over as creative director of Conan Chop Chop after Cross was sacked. In addition, the studio's quality assurance director and a development manager have both recently resigned to pursue other opportunities.  

While extra funding and structural changes, forced or otherwise, might help keep the lights on, it doesn't take care of one of the studio's major issues: It's spending millions of dollars on staff each quarter and revenue isn't keeping pace.

In an October 2021 interview, Lawrence told Sifter that "doing well in this business comes down to releasing good content. If we release good content, the returns will come." 

There are products in the pipeline. Over the past two months, it has made several announcements regarding deals with Google and Lion Studios. It has announced that its work on the Shopkins games will end on Aug. 16 and has shifted staff away from Peter Rabbit Run, one of its licensed IPs, to work on other titles. The studio's only original IP listed in its most recent report, Project Ball Stars, is slated to release in mid-2023, while another licensed IP, based on a yet-to-be-released Australian horror B-movie Carnifex has just entered full production. Unannounced titles could also contribute to raising revenue.

It's difficult to forecast a future for Mighty Kingdom that doesn't see at least some redundancies. "This might affect their ability to keep up with their development schedule, which seems to get pushed back further with every announcement," notes Daniel Arbon, a financial analyst who runs the blog Shorting Hat.

Current employees who spoke with CNET on the condition of anonymity also expressed concern. One employee stated they're worried about the future of the company, noting it's very difficult to trust the people "making decisions at the top." Other industry leaders are concerned, too.

"My main concern is not about Mighty Kingdom as a company but about the large team they have assembled," an Australian games industry veteran who prefers to stay anonymous told CNET. "With over 150 people there is a huge responsibility here to do right by them."       

Mighty Kingdom didn't grant interviews with CNET, nor did it respond to questions regarding possible redundancies.

House of Cards

The fall of Mighty Kingdom would signify a tragic end to a fairy tale run.

The studio has cultivated an environment where employees feel valued and enjoy the benefits of four-day work weeks and unlimited leave. It has developed for big-name brand partners, put Australian game development on the map and consistently pulled in valuable work-for-hire contracts, demonstrating its ability to produce mobile games downloaded by millions of people. It has shifted the perception of what a games studio can be, how it can be run and the importance of diversity and inclusion in attracting the best talent.

It also appears to have mismanaged projects and underdelivered on key promises. Kitty Keeper's development was messy and the battle over its IP has left an ugly mark on the studio's history. When it swung for the fences with its first console title, Conan Chop Chop, it failed to find a new audience. And 18 months after first listing on the ASX, it has neglected to arrest its increasing cash burn until its financial troubles became unavoidable. Its business-as-usual approach has it staring potential catastrophe in the face. 

So what now? It seems that, after years of rapid growth, the kingdom has swelled to unsustainable levels. With a potential police investigation and further litigation a possibility, it's reasonable to ask if Mighty Kingdom is a house of cards on the verge of collapse. 

If it receives a fresh cash injection, as it expects to, then it will buy itself time. If Mighty Kingdom can achieve the promises made to investors — that it will break even by the end of the year and reduce cash burn — it can survive. Hopefully even thrive. But getting there will require a huge turnaround in transparency and accountability. 

Perhaps the most prescient advice for the studio comes from Mayes himself. While discussing Mighty Kingdom's philosophy on finding opportunities in the 2020 interview with Byteside, the CEO noted how important it is to do the hard work and meet with partners to achieve success. The other thing that's important, he said, is "backing up what you say and doing what you say."

This hasn't always been the case for Mighty Kingdom. The consequences, Mayes knows, can be dire.

"You'll get found out pretty quick in this industry," he said in the same interview. "Once you get a bad reputation, it can be tough to shake."

If you work in the games industry and want to reach out, we want to hear from you. You can contact the author securely via Proton Mail.

Updated Aug. 12: Currency conversions between AUD and USD