The Lord of the Rings gaming landscape just received its biggest shakeup in years. Insider Gaming’s Mike Straw dropped an exclusive bombshell on September 29, 2025, revealing that a major new LOTR game is in development with backing from the Abu Dhabi Investment Office to the tune of $100 million. The third-person action title is specifically designed to “compete with Hogwarts Legacy,” suggesting an ambitious open-world adventure that could finally deliver the Middle-earth experience fans have been craving since the disappointing releases of Gollum and other recent failures.
The timing couldn’t be more critical for the franchise. With Embracer Group’s $395 million acquisition of LOTR game rights in 2022 yielding little fruit beyond commercial disasters, this project represents a make-or-break moment for video game adaptations of Tolkien’s beloved world. According to Straw’s sources, the deal has been in the works since last year and could be made official as early as next week, marking the first legitimately exciting LOTR gaming news in over a decade.
The Hogwarts Legacy Blueprint for Success
The comparison to Hogwarts Legacy isn’t accidental – it’s a strategic positioning that reveals everything about this project’s ambitions. Hogwarts Legacy became 2023’s best-selling game by successfully translating a beloved fantasy universe into an open-world action-RPG that satisfied both longtime fans and newcomers. The game’s $1 billion in revenue and critical acclaim demonstrated the massive market appetite for high-quality adaptations of iconic fantasy properties.
“Sources close to the game tell Insider Gaming that a new title is set to be, at least partially, funded by the Abu Dhabi Investment Office (ADIO),” Straw reported. “What was said, however, is that the game will be a third-person action game that is designed, in a way, to ‘compete with Hogwarts Legacy.'” This language suggests not just similar gameplay mechanics, but comparable production values, scope, and market positioning.
The Hogwarts Legacy model provides a proven template: extensive character customization, immersive world exploration, magic-based combat systems, and narrative depth that respects source material while creating new stories. Applying this formula to Middle-earth could create the definitive LOTR gaming experience that fans have sought for decades.
Abu Dhabi’s Gaming Investment Strategy
The Abu Dhabi Investment Office’s involvement represents part of a broader Middle Eastern strategy to diversify sovereign wealth into entertainment and technology sectors. ADIO’s reported $100 million contribution follows similar investments from Saudi Arabia’s Public Investment Fund, which recently helped finance EA’s $55 billion acquisition and maintains significant stakes in major gaming companies worldwide.
This funding level puts the project firmly in AAA territory, comparable to budgets for games like Assassin’s Creed, The Witcher 3, or other major open-world productions. The investment suggests confidence in both the Lord of the Rings IP’s market potential and the development team’s ability to execute on the ambitious vision.
“The deal has been in the works since last year, and, while not signed yet due to the number of moving parts, is said to be made official ‘soon’ and could happen as early as next week,” according to Straw’s reporting. “Regarding current funding of the game’s development, it has been funded internally” until now, indicating the project has already achieved significant development milestones.
Embracer Group’s Redemption Opportunity
For Embracer Group, this project represents a crucial opportunity to justify their massive investment in Middle-earth Enterprises. The Swedish conglomerate paid nearly $395 million in 2022 for exclusive rights to LOTR video games, films, TV shows, and merchandising – a bet that has yet to pay dividends given the commercial and critical failures of subsequent releases.
The Lord of the Rings: Gollum became one of 2023’s most notorious disasters, while Return to Moria and Tales of the Shire failed to capture mainstream attention. These failures created significant pressure on Embracer to prove their LOTR investment wasn’t a catastrophic mistake, making this new project essential for the company’s credibility and financial health.
Embracer is currently restructuring into three separate entities, with Middle-earth Enterprises becoming its own dedicated division focused entirely on Tolkien properties. This organizational change suggests the company recognizes the strategic importance of successfully monetizing their LOTR rights through high-quality productions rather than rushed cash grabs.
Developer Revenge and Studio Partnerships
The involvement of developer Revenge adds an intriguing element to the project’s development structure. While Revenge isn’t a household name in AAA development, their participation alongside Embracer Group and “other studios” suggests a collaborative approach that could combine specialized expertise from multiple teams.
This multi-studio model has become increasingly common for ambitious projects, allowing different teams to focus on specific aspects like world design, combat systems, narrative implementation, or technical optimization. The approach could help ensure the game meets the high production standards necessary to compete with titles like Hogwarts Legacy.
However, both Embracer and Revenge have remained tight-lipped about the project. When contacted by Insider Gaming, Embracer responded that “as a general rule, we do not comment on rumors or speculation,” while Revenge similarly “declined to comment on ‘rumor and speculation.'” This silence, while expected, adds credibility to the leak while maintaining official deniability.
Community Response and Fan Expectations
The gaming community’s reaction to Straw’s exclusive has been overwhelmingly positive, with fans expressing cautious optimism mixed with skepticism based on recent LOTR gaming disappointments. Reddit discussions show players are particularly excited about the Hogwarts Legacy comparison while remaining wary of another potential disaster.
“Hogwarts Legacy in the LOTR universe? This immediately becomes my most anticipated game,” commented one Reddit user, capturing the enthusiasm many fans feel about the project’s potential. However, others urged caution: “Gotta hear who the lead dev studio is before I get my hopes up,” reflecting the community’s wariness after recent failures.
The most common concern involves execution rather than concept. “Throwing money at LotR doesn’t work, you need genuine passion and understanding of the IP which is hard asf to come by,” warned another user, highlighting the franchise’s track record of poorly executed adaptations despite adequate budgets.
The LOTR Gaming Legacy and Market Opportunity
The Lord of the Rings gaming franchise spans over four decades, from early text adventures to major console productions. The most successful entries – EA’s movie tie-in games from the 2000s and the Middle-earth: Shadow series – succeeded by understanding what makes Middle-earth special while creating engaging gameplay that serves the fantasy rather than fighting it.
Recent failures like Gollum and Return to Moria have demonstrated what doesn’t work: low budgets, poor technical execution, and fundamental misunderstanding of what fans want from LOTR games. These disasters have created a market vacuum that a properly executed AAA production could fill completely.
The timing also benefits from broader trends in fantasy gaming. Hogwarts Legacy’s success proved massive appetite exists for high-quality fantasy world exploration, while games like Baldur’s Gate 3 showed that narrative depth and character development can coexist with modern production values. A LOTR game incorporating these lessons could achieve unprecedented success.
Technical Speculation and Gameplay Possibilities
While specific gameplay details remain scarce, the “third-person action game” description and Hogwarts Legacy comparison provide clues about potential mechanics. Players can likely expect character creation systems, progression-based magic or combat abilities, extensive exploration across iconic Middle-earth locations, and narrative choices that impact story outcomes.
The $100 million budget suggests production values comparable to major open-world titles, potentially including full voice acting, orchestral soundtrack, detailed environmental design, and complex quest systems. The financial commitment implies confidence in creating a premium experience rather than a budget-conscious adaptation.
Combat systems could incorporate LOTR’s distinctive warfare styles – swordsmanship, archery, magic, and large-scale battles that defined the books and films. The third-person perspective allows for cinematic presentation of these elements while maintaining the player agency that modern audiences expect.
Market Impact and Industry Implications
A successful LOTR game could reshape expectations for fantasy gaming adaptations while proving that properly funded, respectfully executed franchise games can achieve both critical acclaim and commercial success. The project’s outcome will likely influence future investment decisions in similar properties across the gaming industry.
For the broader Middle Eastern gaming investment trend, this project serves as a test case for sovereign wealth fund involvement in major Western entertainment productions. Success could encourage additional investments, while failure might prompt more cautious approaches to gaming sector participation.
The timing also positions the game to capitalize on renewed LOTR cultural interest generated by Amazon’s The Rings of Power series and upcoming Warner Bros. film projects. A coordinated multimedia approach could create synergistic marketing opportunities that benefit all Tolkien properties.
Timeline and Official Announcement Expectations
According to Straw’s reporting, an official announcement could come “as early as next week” from the September 29 publication date, putting a potential reveal in early October 2025. This timeline suggests the project has reached sufficient development maturity to warrant public disclosure and begin marketing activities.
However, initial announcements typically provide minimal gameplay details, focusing instead on confirming development, partnerships, and broad creative vision. Substantial gameplay reveals, release windows, and platform information would likely come months later through dedicated showcases or major gaming events.
The rapid timeline from leak to potential announcement suggests either Insider Gaming’s reporting prompted accelerated disclosure plans or the announcement was already scheduled and the leak simply preceded official communication.
Frequently Asked Questions
Who reported this Lord of the Rings game exclusive?
Mike Straw from Insider Gaming broke the story on September 29, 2025, citing sources close to the project who provided details about funding, development, and partnerships.
How much funding is the Abu Dhabi Investment Office providing?
According to the report, ADIO is contributing approximately $100 million to partially fund the project, though the deal hasn’t been officially signed yet.
Which studios are developing the new LOTR game?
The report mentions Embracer Group (which owns LOTR game rights) and developer Revenge as being involved, along with “other studios,” though specific details about the lead developer remain unclear.
What type of game is being developed?
Sources describe it as a third-person action game specifically designed to “compete with Hogwarts Legacy,” suggesting an open-world fantasy adventure with RPG elements.
When might the game be officially announced?
The report suggests the deal could be made official “soon” and “could happen as early as next week” from September 29, meaning early October 2025.
How have the companies involved responded to these reports?
Both Embracer Group and Revenge declined to comment, with Embracer stating they “do not comment on rumors or speculation” as a general rule.
How long has this project been in development?
According to the report, the game “has been in development and has been for some time,” with the funding deal “in the works since last year.”
Conclusion
Mike Straw’s exclusive report represents the most significant Lord of the Rings gaming news in years, offering genuine hope for a franchise that has struggled to find its footing in the modern gaming landscape. The combination of substantial funding, ambitious scope, and strategic positioning against proven successes like Hogwarts Legacy suggests this project could finally deliver the Middle-earth experience fans have been waiting for.
Whether the game can overcome the franchise’s recent struggles depends on execution, but the financial commitment and collaborative development approach indicate serious intent to create something special rather than another cash grab. The potential early October announcement will provide the first official confirmation of what could become one of gaming’s most anticipated projects.
For Lord of the Rings fans who have endured years of disappointing adaptations, this news offers the tantalizing possibility of finally exploring Middle-earth in the way it deserves – with the budget, vision, and respect necessary to honor Tolkien’s creation while delivering the interactive adventure that only gaming can provide. The only question now is whether the developers can match their ambitions with execution worthy of the source material.