Thatgamecompany reinvests Sky profits into full-service publishing arm as fifth indie mega-hit to bypass traditional publishers

Thatgamecompany has launched Thatgamepublisher, a full-service publishing arm funded by Sky profits. It is the fifth mega-indie publishing label to launch in roughly two years. VP SJ Xue says the label signs games reaching for meaningful emotional territory. Sky's anti-harder-edged monetisation stance carries over to Thatgamepublisher's signed titles. Mobile is Sky's largest player base, and AppMagic estimates $183.8m in mobile revenue.

Surplus live-service cash created the funding mechanism
Journey nearly bankrupted Thatgamecompany in 2012, triggering studio-wide layoffs.
Sky: Children of the Light's success in China reversed that position by 2019.
"Successful indie games usually are on a shoestring, and if the game becomes very successful, suddenly you have an overflow of cash." - Jenova Chen, co-founder, Thatgamecompany
Growing headcount would break the lean model that produced Sky's hit.
Publishing offers a lower-risk outlet for that surplus cash.

Five indie hit-makers have made the publisher jump in two years
Innersloth (Among Us) launched Outersloth in 2024, backing Clickolding and The Horror at Highrook.
Kinetic Games (Phasmophobia) launched Kinetic Publishing, signing Sam Barlow's Precognition.
Pocketpair (Palworld, 32m+ players in year one) launched Pocketpair Publishing in 2025.
Landfall (Peak co-dev) launched Evil Landfall as a funding-only label.
Thatgamepublisher is the most operationally comprehensive of the five, offering AA-level budget capacity.

Full-service positioning counters the modular publishing trend
Outersloth and Evil Landfall operate as funding-only labels.
Thatgamepublisher adds production, marketing, community and long-term IP development on top of funding.
"For emotionally ambitious projects, creative development, production, positioning, marketing, community, and platform strategy are often deeply interconnected." - SJ Xue, VP of Growth and Corporate Development, Thatgamecompany
The wider market trend runs toward modular, pick-and-mix publishing, making this integration a contrarian bet.

Player communities now outrank platforms as distribution channels
"You actually have more influence for distribution than GameSpot, than IGN, than Steam." - Jenova Chen, co-founder, Thatgamecompany
Roughly 70% of Sky's 300m+ players are female, a reach few traditional publishers can match.
Sky's base includes many players who never played games before, extending reach beyond core gamers.

New Xue comments detail the label's criteria and funding base
Xue says Thatgamepublisher signs games reaching for meaningful emotional territory, regardless of genre or platform.
Teams of any size are eligible, including projects still at prototype stage.
Sky's long-standing stance against harder-edged monetisation carries over to Thatgamepublisher's signed titles.
Mobile is Sky's largest player base, with AppMagic estimating $183.8m in mobile revenue since 2019.
Xue calls console and Steam versions healthy, without disclosing an exact platform split.
What this means
For Publishers & Developers: Strip aggressive monetisation hooks from pitch decks before approaching hit-studio publishing labels.
For Investors & VC: Accelerate term sheets on narrative indie prototypes now courted by cash-rich studio labels.
For Service Vendors: Pitch production and marketing services to teams signed by funding-only indie labels.