New AAA Lord of the Rings Game in Development, Aiming to Rival Hogwarts Legacy
A $100 million investment from Abu Dhabi is backing a third-person action game set in Middle-earth.
After years of middling Lord of the Rings games, it looks like the franchise might finally be getting the big-budget treatment fans have been waiting for. According to reports from Insider Gaming, a new AAA Lord of the Rings game is in active development, and it's being positioned to compete directly with Hogwarts Legacy.
The project is reportedly being funded in part by the Abu Dhabi Investment Office (ADIO) to the tune of around $100 million. As of October 2025, that deal has been signed, though no official announcement has been made yet.
What We Know So Far
Details are thin, but here's what's been reported: the game will be a third-person action title, likely open-world given the Hogwarts Legacy comparison. It's being developed by Revenge Studios, an India-based studio with fewer than 50 employees and a relatively unknown track record, alongside Embracer Group, the current rights holders to the Lord of the Rings gaming IP.
Embracer acquired the rights back in 2022 for nearly $400 million. Since then, they've mostly licensed out the IP to other developers rather than building something in-house. That strategy gave us The Lord of the Rings: Gollum, which didn't exactly set the world on fire.
Both Embracer and Revenge have declined to comment, citing their standard policy of not addressing rumours or speculation.
The Hogwarts Legacy Comparison
Avalanche Software's Harry Potter game was the best-selling title of 2023 in the US, offering an open-world RPG experience with character customisation and a story-driven campaign. If this new LOTR game is aiming for that same scale, we could be looking at an open-world Middle-earth experience with custom characters and light RPG elements. The kind of game fans have been asking for since the PS2 era.
Worth noting: Hogwarts Legacy reportedly cost around $150 million to develop. This LOTR project has $100 million confirmed from ADIO, with additional internal funding from Embracer. Whether that's enough to truly compete remains to be seen.