EVR Studio Goes Bankrupt, MUDANG: Two Hearts Is Cancelled, Xbox's 'Korean Splinter Cell' Is Dead

EVR Studio, the South Korean developer behind MUDANG: Two Hearts, has been declared bankrupt by the Seoul Bankruptcy Court. The third-person stealth-action game that wowed viewers at the Xbox Games Showcase 2025 is officially dead, and so is the studio that built it. Court documents shared on the MUDANG subreddit and picked up by Kotaku and Korean press confirm that the 11th Division of the Seoul Bankruptcy Court pulled the plug on June 5, 2026. The news lands almost a year after the reveal trailer racked up nearly half a million views and lit up the Xbox Showcase comment section with reactions like Korean Splinter Cell, this looks insane, and Great military atmosphere, intense gunplay and nice looking characters.

What MUDANG Promised Xbox

MUDANG: Two Hearts was pitched as a linear, character-driven stealth-action shooter with deep South Korean mythology baked into the world. The 2025 reveal trailer showed a third-person protagonist trading throws with elite soldiers, sliding through cluttered industrial environments, and pulling off contextual death animations that were hard to look away from. The developers, EVR Studio, called their own tech GAVI 2 and showed off motion matching, advanced enemy AI, and boss fight systems in a steady stream of monthly dev diaries. The game had a Turkish localisation in the works and was being talked about as a 2026 release window. That promise is now in a bankruptcy filing, and the trailer is the closest anyone outside EVR will ever get to the finished product.

The Slow-Motion Collapse of EVR Studio

EVR Studio was founded in January 2016, and the company's pivot from VR to Metaverse to games is the kind of business history that should have been a red flag from the start. The original team built VR exhibits for the Gansong Art Museum, helped the DDP cinema project, and rode the post-pandemic Metaverse investment wave that was supposed to make everybody rich. By 2022, the founders were lining up a Kosdaq IPO backed by LB Investment, LG, and Kiwoom Securities. They pulled the IPO before listing, debt piled up, and the pivot into Mudang was the last big bet. A 17.5 billion won convertible bond issued by LB Investment came due and was never paid back, and the company's cash cushion evaporated.

Need4Games reported in January 2026 that EVR had already shrunk from more than 100 employees to just 22, and the official website had been quietly taken down. The studio's YouTube channel went silent in August 2025 after a steady run of monthly developer diaries. Korean press at Hankyoreh 21 confirmed the company's losses had reached 13.3 billion won, that capital had eroded to minus 2.66 billion won, and that the founder's last attempts to find a buyer or a refinancing partner had failed. There was no white knight, and the bankruptcy court moved in. The Korean gaming press is blunt about why: the Metaverse dream died after the pandemic, EVR pivoted into game development too late, and the money simply ran out before the game could land.

The Latest Xbox Showcase Casualty

Xbox's big summer showcases have produced a steady stream of these announcements. Big trailers, glowing comments, and then silence. MUDANG: Two Hearts joins a graveyard that includes Scalebound, Fable Legends, and a long list of pitches that never made it past the hype cycle. The 2025 Xbox Games Showcase in particular leaned hard on international indie studios and unscripted reveals, and the Korean studios that showed up that year, EVR included, were the ones with the smallest safety nets. Showing a great trailer does not pay the next payroll. Showing a great trailer while still raising money and trying to scale a 100-person team around a never-shipped product is the recipe that just killed Mudang.

Community Reaction

The reaction on X is mostly mourning with a side of we called it. Spanish and Portuguese outlets Central Xbox and Semonster ran obituaries the same day Kotaku's story broke, with Semonster's post pulling 156 likes and 8 million views in less than 24 hours. Turkish fan @SythoVfx wrote that the game would have been one of the best linear shooters of the year and was sad to see it cancelled, especially since a Turkish translation was already confirmed. The MUDANG subreddit had been bracing for bad news since the layoffs in 2025, and many posters are now sharing the bankruptcy filing as a coda to months of quiet. Nobody stepped in to save the studio, and that silence is the part that stings the most. If MUDANG was as good as the trailer looked, the IP and the team should have been too valuable to let die.

CriticalPixel Take

This is what showcase vaporware looks like at the end. A studio with no safety net, an IP nobody else wanted to own, and a community that cared more about the game than the industry did. The trailer sold the dream, the dev diaries sold the craft, and the actual financial math never worked. If you backed MUDANG with your wishlist, the lesson is the same one Splinter Cell fans learned a decade ago: a great reveal is not a release. EVR had real tech, real talent, and real momentum coming out of the 2025 showcase, and the system around them still let them go bankrupt quietly in a court in Seoul. The Korean gaming industry has been producing some of the most interesting action games of the last few years, and the studios behind them keep getting crushed by the same capital crunch. We will remember the trailer. We should also remember the studio.

The Xbox Games Showcase 2025 has lost one of its biggest surprises, and a small Korean team has lost everything. With no buyer stepping in and the official EVR Studio website already offline, MUDANG: Two Hearts is almost certainly not coming back in any form. Anyone still holding out for a spiritual successor to Splinter Cell is still waiting. At this point, the only place to find MUDANG is in a YouTube trailer and a Seoul court document. That is a brutal way for a studio's tech to be remembered, and a brutal way for fans who believed the showcase to be let down.