Paradox Interactive has parted ways with Cities: Skylines developer Colossal Order in a mutual decision “made thoughtfully and in the interest of both teams”.

The publisher and developer have worked together on the series for over 15 years. Now, Colossal Order will explore “new creative opportunities”, while development on Cities: Skylines 2 will transfer to Finnish developer Iceflake Studios, which is one of Paradox’s internal management game studios.

The city building sequel was released back in October 2023, but was heavily criticised at the time for performance issues. Console versions, meanwhile, remain some way off following seemingly troubled development.

Official Release Trailer | OUT NOW I Cities: Skylines IIWatch on YouTube

“For over fifteen years, the Cities Series and our partnership with Paradox have been a defining part of our journey at Colossal Order,” said Mariina Hallikainen, CEO of Colossal Order, in a shared statement.

“When we set out to create Cities in Motion, we never imagined it would grow to become a cherished franchise with a passionate, loyal community of millions of players around the world. We want to thank everyone at Paradox for their trust and collaboration, and of course the community for the incredible support that has made Cities what it is today. We’re confident that the franchise will continue to thrive under Paradox’s leadership. As we move forward, we’re excited to channel our experience, creativity, and passion into new projects that align with our long-term vision.”

Added Mattias Lilja, deputy CEO of Paradox Interactive: “Our partnership with Colossal Order is one of the longest-running relationships we’ve enjoyed here at Paradox. Four games, dozens of expansions, and a community of millions of Cities players; it’s remarkable how much we’ve achieved together. We have deep respect for the Colossal Order team and we look forward to seeing where they go from here. On our end, we’re eager to continue working for the passionate Cities: Skylines community and make sure to provide them with more content and new experiences.”

Iceflake Studios will take over all ongoing development on Cities: Skylines 2, including free updates, continuous work on the Editor, forthcoming console editions, and future expansions. The studio will take the helm at the start of 2026.

“Taking the reins on a genre-leading franchise like Cities is an immense honour and a great responsibility,” said Lasse Liljedahl, studio manager of Iceflake Studios.

“There’s a huge, loyal community out there and I want to say to every member of that community that we will humbly carry this legacy with respect, together with all of you. Iceflake has the capacity and capability to get started. We have a decade worth of experience from making city building and management games. We see a strong foundation and so much potential waiting to be unleashed and I can’t wait to show you what we have planned for the next chapter of this incredible game.”

Colossal Order still has some work to finish up, including the forthcoming Bike Patch, Old Town buildings, bug fixes, and general improvements.

The last few years have been a troubling time for Paradox, known for publishing strategy and simulation games. News of this change in developer follows its parting ways with Prison Architect 2 developer Double Eleven last year, as well as the sudden cancellation of its Sims-like game Life By You.

“What we have to do is start small, listen to the fans early, and most importantly, stay within our core,” Lilja told Eurogamer last year, discussing the company’s future. “We do more extensive and earlier peer reviews to get honest feedback earlier.

“We do want to take risks. We want to try new things,” he added. “But we need to be much more disciplined about it than we’ve been.”

Last month, Paradox released its long-awaited action-RPG Vampire: The Masquerade – Bloodlines, though it received negative reviews. “The Chinese Room has managed to make something from a box of inherited parts, but this action RPG feels hollow and functional, and is only redeemed by some stellar performances from the characters and cast,” reads our review.