Warhorse Studios Confirms Open-World Middle-earth RPG | New Kingdom Come Title Announced

The Announcement | Two Projects, One Studio

On Wednesday, May 20, 2026, Prague-based developer Warhorse Studios confirmed it is simultaneously developing two major titles: an untitled open-world Middle-earth RPG and a new entry in the Kingdom Come franchise. The double announcement arrived during the Q4 FY 2025-26 earnings call of parent company Embracer Group, ending months of speculation about the studio's post-Kingdom Come: Deliverance 2 direction.

Kingdom Come: Deliverance 2, released in early 2025, became one of the best-reviewed RPGs of that year and demonstrated that Warhorse's uncompromising approach to historical accuracy, complex first-person melee, and grounded survival mechanics had a substantial and loyal audience. The studio now intends to take both of its confirmed franchises forward simultaneously. For ongoing coverage of the broader video games industry, see OzoneNews's gaming hub.

The Middle-earth Project | Grounded Realism Meets Tolkien's Universe

Warhorse Studios has never made a fantasy game. Every title in its catalog has been anchored in documented medieval history, prioritizing accuracy over genre convention. The Middle-earth announcement therefore represents the most significant creative departure in the studio's history and one of the more distinctive pairings between a developer's established design signature and a major licensed universe in recent gaming memory.

Critically, Warhorse's statement used the phrase "open-world Middle-earth RPG" rather than branding the project as a Lord of the Rings game. That distinction carries real IP weight. Embracer Group acquired Middle-earth Enterprises in 2022, giving it licensing rights to J.R.R. Tolkien's broader fictional universe, not merely the film adaptations. That scope allows Warhorse to set the game in eras, regions, or storylines that have no corresponding film IP, including the First and Second Ages of Middle-earth, which cover thousands of years of Tolkien's mythology that the Peter Jackson films never touched.

Gaming analysts cited by industry trade outlets suggested the studio may be targeting one of those pre-Ring eras specifically, applying their trademark first-person perspective and survival-grounded design to a corner of Tolkien's world that no game has ever occupied. No title, release window, or gameplay footage has been revealed.

New Kingdom Come | "A New Adventure," Not a Direct Sequel

The second confirmed project keeps Warhorse in its established historical RPG space, but the studio's deliberate language warrants attention. The announcement described the project as "a new adventure in the Kingdom Come franchise" rather than a numbered sequel. That is a meaningful departure from how publishers typically tease direct follow-ups.

The phrasing has prompted three competing theories among the studio's community: a spin-off with a different protagonist set in a different region of medieval Bohemia, a direct continuation of Henry's story rebranded to distinguish it from the Deliverance sub-series, or a prequel set in the same region during an earlier historical period. Warhorse has provided no further clarification. The studio's track record, specifically the decision to build Deliverance 2 as a direct continuation rather than a new character story, suggests the franchise has at least one more chapter in Henry's arc before a full protagonist change, but the current announcement does not confirm that.

Fellowship Entertainment | Embracer's Nasdaq Stockholm Spin-Off by 2027

The project reveals were not the only major news from the Embracer Q4 call. CEO Phil Rogers announced a structural separation of the company's premium IP division into a new, independently listed entity: Fellowship Entertainment. The company plans to list Fellowship on Nasdaq Stockholm by 2027.

Fellowship Entertainment's portfolio as announced includes:

• Warhorse Studios and both confirmed projects
• The Lord of the Rings and The Hobbit intellectual property (acquired 2022)
• Tomb Raider and Crystal Dynamics
• Dead Island
• Remnant franchise

The spin-off targets a minimum of two major AAA releases per year beginning in the 2027-28 fiscal year. That pace would require both confirmed Warhorse titles to be in mature production simultaneously, a significant staffing and coordination challenge given that the studio's entire catalog to date was produced on single-project development cycles.

The Fellowship structure mirrors a pattern visible elsewhere in the European games publishing landscape, where companies under financial pressure are separating premium IP into independently capitalized entities to attract institutional investors. Ubisoft's own €1.3 billion loss and Creative Houses restructure from April 2026 reflects the same underlying dynamic: publishers are reorganizing around their highest-value franchises to survive the post-live-service correction in the broader industry.

Embracer Q4 FY 2025-26 | The SEK 7.2B Write-Down and a Canceled AAA Project

The strategic announcements were the investor-facing answer to a difficult financial quarter. Embracer reported the following results for Q4 FY 2025-26, covering the period ending March 31, 2026:

The SEK 7.2 billion impairment is the figure that demands context. That write-down corresponds to a canceled project that was never publicly announced, one large enough that its cancellation required a write-down larger than the full quarterly net sales figure. Embracer has not identified the project by name or development studio. The scale of the write-down implies the canceled game had been in active production for several years before the decision was made to terminate it.

The back catalogue growth driven by KCD2 is a useful data point in the opposite direction: it confirms the title's long-tail commercial profile, sustaining Embracer's revenue base even a full year after release, and it reinforces the strategic logic of building Fellowship Entertainment around Warhorse as an anchor studio.

Daniel Vávra | From Game Director to Film Producer

The Warhorse announcements follow a leadership transition that the studio had kept relatively quiet. Daniel Vávra, the game director credited with creating the original Kingdom Come: Deliverance and establishing the franchise's design philosophy, stepped down from his core development position earlier in 2026. Vávra is now directing his focus toward adapting the Kingdom Come intellectual property into a feature-length film.

The transition does not appear to be adversarial. Vávra remains connected to the franchise, and a film adaptation would extend the IP's reach beyond gaming audiences. The studio's ability to confirm two simultaneous major projects suggests that its production leadership infrastructure has matured beyond single-director dependency, which is a necessary condition for the two-AAA-per-year cadence that Fellowship Entertainment has targeted.

Why This Matters | The First Grounded Tolkien RPG

Every major Middle-earth video game to date has been an action title, a strategy game, or a licensed film tie-in. Shadow of Mordor and Shadow of War (Monolith Productions) were third-person action games with nemesis systems. The War in the Middle-earth series was real-time strategy. No studio has ever brought first-person survival RPG mechanics, the kind Warhorse built for 15th-century Bohemia, to Tolkien's universe.

That specific combination, grounded physics, complex melee, period-accurate material culture applied to a fantasy world with 90 years of source material, is either the most compelling concept in Middle-earth gaming history or the one with the highest risk of creative identity conflict. Warhorse's reputation was built on the absence of fantasy conventions. Middle-earth is, by definition, a fantasy world. How the studio resolves that tension will determine whether the project becomes a landmark or a miscalculation.

The answer arrives no earlier than the Fellowship Entertainment listing on Nasdaq Stockholm in 2027. Reported by Max DeLeonardis, OzoneNews Gaming Desk.