$2.6 Million Cozy Game Vanishes, Backers Left in Limbo

PuffPals: Island Skies, a game spearheaded by plush-toy maker Fluffnest, raised over $2.5 million via Kickstarter in 2022 with promises of a cozy life simulator experience—but as of late 2025 the project’s web presence has vanished, refund requests from backers are going unanswered, and multiple lawsuits have been filed against the creators. The Kickstarter page hasn’t had a substantive update since May 2025, and the game’s domain now redirects to a domain-for-sale page. According to investigations by YouTuber Mujin and coverage from gaming press, a significant portion of the funds pledged were for add-ons like plushies rather than game development, and the studio outsourced much of the actual work (e.g., to Room 8), with those contractors now suing Fluffnest. Amid claims of expired trademarks, nonpayment of wages, and lawsuits, the fate of PuffPals remains unclear, and the odds are slim that many backers will see refunds—or the game they were promised.
Sources:
Kotaku
,
PC Gamer
Key Takeaways
– The project’s appearance of success masked serious misallocation of funds—much of the money counted toward the pledge total came from plush and add-on purchases rather than core game development.
– Fluffnest’s lack of transparency, failure to maintain basic web infrastructure, and legal actions against and from third parties strongly suggest severe mismanagement or worse.
– Kickstarter’s model inherently limits recourse for backers—the platform does not guarantee delivery or refunds, and legal recovery is often complex and expensive.
In-Depth
When PuffPals: Island Skies launched in April 2022, the pitch was enticing: a cozy, relaxed PC game inspired by Animal Crossing, where players could farm, explore, customize and build relationships in a soft, whimsical world. The studio behind it, Fluffnest, was already known for its plushie brand, a business that had built a fanbase through drop-style sales of cute stuffed characters. That track record likely helped lend credibility to the campaign. The project sought a modest $75,000 in initial funding—but ultimately claimed to raise well over $2.5 million after factoring in additional “add-on” purchases.
Trouble began to surface over time as updates slowed, promised progress repeatedly delayed, and communications from the developers became vague and contradictory. As watchdogs and community investigators dove in—especially the YouTuber Mujin—several red flags emerged. First, a large share of the revenue was tied not to the game itself but to collectible plush add-ons, which technically counted toward the pledged total but didn’t advance the software side of the project. Second, it seems the core game work was outsourced to another developer (Room 8), which is now suing Fluffnest for nonpayment. Third, trademarks associated with PuffPals reportedly lapsed, and the company’s public storefronts have been shut or suspended.
By mid-2025, the situation had deteriorated sharply. The last Kickstarter update was posted in May, with references to NDAs and internal turmoil. Since then, the game’s domain has reverted to an expired or for-sale page, the Kickstarter appears abandoned, and backers have largely been left to fend for themselves. Meanwhile, lawsuits continue to accumulate: Fluffnest has been sued for debt repayment, and Room 8 is pressing claims for owed funds. Some staffers and contractors claim they were never paid. The moral and financial consequences remain unresolved.
So, what does the PuffPals debacle teach us about crowdfunded games? First, the blend of physical merchandise (plushies) and software promises can obscure how much money is truly being invested in development. Second, even with millions of dollars flowing in, poor planning, overextension, or mismanagement can sink a project. And third, backers in crowdfunded ventures accept a real risk—Kickstarter and similar platforms simply facilitate pledging, not enforce accountability or product delivery.
Unless the courts deliver a surprising reversal, many backers may never see refunds or a finished game. PuffPals may join the ranks of crowdfunded projects that promised the moon, delivered half an illusion, and left supporters holding the bill.