Postal game developer shuts down after its project was cancelled due to allegations of generative AI use

The studio working on the next game in the Postal series has been shut down, after the project was cancelled by the publisher following accusations that the studio was using generative AI.

After an announce trailer for Postal: Bullet Paradise – developed by Goonswarm Games – was posted last week, numerous players suggested that some elements of the trailer’s artwork may have been created using generative AI.

Following the allegations, Postal series publisher Running With Scissors initially denied the claims, with co-owner Mike Jaret-Schachter telling people on the publisher’s Discord that they’re “ignorant assholes” if they believe generative AI was used.

Responding to Discord users who continued to claim it was AI, Jaret-Schacter replied: “It’s literally not. Sorry guys, your wet dream is wrong. Dead. Fucking. Wrong.” Meanwhile, Running With Scissors community manager Zeron told one Discord member they were a “r*tard” for believing generative AI was used.

Developer Goonswarm Games responded to players by posting what it claimed were work-in-progress files ‘proving’ the artwork was created manually, but some were also suspicious that these appeared to be questionable, with some accusing them of tracing over the existing art.

In a statement to PCGamesN, Goonswarm said: “No generative AI was used for the reveal trailer or for the game. All assets were created by our human artists using standard tools. We’ve already shared layered PSDs, work-in-progress files, and other materials to confirm this. Any mistakes or rough spots in those files are being misinterpreted as ‘proof’ of AI, but they simply reflect the normal, human art-creation process.”

Despite initially defending the developer and criticising those making accusations, however, Running With Scissors eventually posted a statement on X in which it appeared to backtrack on its defence of Goonswarm Games, saying its trust in the studio was “broken” and that the game had been cancelled.

“After revealing Postal: Bullet Paradise, a title Running With Scissors was planning on publishing but not developing, we’ve been overwhelmed with negative responses from our concerned Postal Community,” the statement read.

“The strong feedback from them is that elements of the game are very likely AI-generated and thus has caused extreme damage to our brand and our company reputation.

“We’ve always been, and will always be, transparent with our community. Our trust in the development team is broken, therefore we’ve killed the project. We have a lot of good things coming (some you know and some you don’t).”

Seemingly referring to the attacks on its community, the publisher added: “We’d like of course to apologize to anyone who felt insulted in the heat of the moment and we thank you for raising concerns at the time. As for those who specifically sent us death threats, the apology does not apply.”

Following Running With Scissors’ statement, developer Goonswarm Games then announced it was shutting down entirely, while still maintaining its claim that it didn’t use generative AI for Postal: Bullet Paradise.

“Our project, and everything we built over the past six years, was canceled in just a few days,” it wrote. “Our studio was mistakenly accused of using Al-generated art in our games, and every attempt to clarify our work only escalated the situation. In the last few hours, we’ve received a large number of threats, insults, and mockery, which pushed us toward a very difficult decision.

“We’re truly sorry for the artists who put their soul into this and supported our studio, only to face false Al accusations. It’s tough to pour so much energy into a game and end up caught in the middle of an Al war by accident.

“We’ve decided to shut down the studio and end all future activities. Thank you for being with us. Stay strong, play games.”

The following day, the studio posted another statement conceding that some generative AI was indeed used, but only for promotional art which it claims was created by external artists.

“We want to start with a sincere apology to everyone affected by this situation – the community, our partners, and especially the artists who supported us,” it wrote.

“The last few days have been overwhelming. As a small studio, suddenly pushed into the spotlight, we reacted emotionally and defensively. The accusations came as a shock, and we needed time to breathe, look at everything calmly, and understand what truly happened.

“After taking that time and conducting an internal review, we agree with your criticism. The promo art does appear to include or be influenced by Al-generated material. We collaborated with external artists for years and never saw any signs of this. The layered PSDs always looked legitimate within our internal pipeline, which is why our initial reaction was to protect our team and defend our innocence. We understand now that your concerns were valid. And we take responsibility for not catching this earlier.

“We also want to stress that this issue relates only to the promo art and does not concern the real artists who worked on gameplay visuals, assets, and other content. Many of them have nothing to do with this situation, yet they have been receiving threats, harassment, and hatred. This is deeply unfair, and we hope this message helps protect them. Their work is real, and it deserves respect.

“We previously announced the closure of the studio, but even in this state we feel responsible for the outcome. As far as our remaining resources allow, we will replace all disputed promo art across our projects with pieces created entirely by human artists. It will take time, but we will do it.

“We again apologise to everyone who was harmed or affected by this situation. We never intended to mislead anyone, and our earlier statements reflected what we honestly believed at the moment.”

The game appears to still be cancelled, and Goonswarm appears to still be closed at this point.