Goonswarm Games has shut down completely after Running With Scissors canceled their contracted Postal spin-off following accusations of AI-generated art.
The project, titled Postal: Bullet Paradise, was announced as a Vampire Survivors-style bullet hell shooter set in the Postal universe. Running With Scissors had contracted the independent studio Goonswarm Games to develop the game as an officially licensed spin-off.
Within hours of the announcement, fans began flagging promotional artwork that showed telltale signs of AI generation. Critics pointed to inconsistent lighting, deformed anatomy, and smudged pixel patterns in both key art and character designs.
Goonswarm denied using AI-generated art in their games. Mike Jaret, a co-owner at Running With Scissors, initially defended the project aggressively. He called accusers “ignorant assholes” and told anyone convinced the game used AI to leave the company’s Discord server.
That stance didn’t last. Running With Scissors announced it was canceling Postal: Bullet Paradise entirely. The company cited “serious concerns” about AI-generated art and said the criticism had caused “extreme damage to our brand and our company reputation.”
Goonswarm attempted to clarify, claiming an “external artist” had used AI for some promotional images without their knowledge. The studio insisted in-game assets remained human-made. Few believed the explanation, especially given that observers had already identified AI-like art in Goonswarm’s previous titles.
The cancellation proved fatal for the small studio. Running With Scissors held all rights to the Postal IP and the contracted work. Goonswarm couldn’t release the game independently or salvage any assets for future projects.
In their shutdown announcement, Goonswarm stated that “everything we built over the past six years was canceled in just a few days.” They claimed to be “mistakenly accused” and apologized “to the artists who put their soul into this and supported our studio.”
The financial reality was simple. Goonswarm had lost its publisher, its main contract, and its funding stream. Small studios typically operate on milestone payments from publishers. When those payments stop, there’s no money to pay staff or continue operations.
Goonswarm’s track record before landing the Postal contract raised red flags. The studio had released several low-budget titles with promotional art that resembled AI-generated images. None of their previous work involved major IPs or significant production budgets.
