There’s no single answer to your question because there’s a lot of unknown factors. The game may have been in development for a year, but the situation would be very different depending on when the game is scheduled to launch. If the game is very close to launch (e.g. how FIFA launches a new game each year), then it is unlikely that much will change - all of the deals are likely already in place. If the game is still a long ways off from launch (8+ months), then it’s entirely possible that the publisher will probably reevaluate the project.
When the publisher reevaluates a project, it’s usually more of a deep dive into whether the original plan still makes sense given the new situation. During an economic downturn, publishers tend to be much more conservative because players are much less willing to spend on new things. Sequels and established franchises sell better than new IP and games. New IP and innovation tend to be a lot riskier in bad economic times - customers have less money to spend so they are less willing to take chances with something new, which means that publishers are also less willing to bankroll something new.
If the project is deemed to no longer be viable, there’s a couple of options. The publisher can cancel it outright or ask for a redesign to meet some new goals like a different genre, adding a licensed property, changing the scope to make the game either bigger or smaller, changing the target platform, and so on and so forth. In such situations, the team is often given a few months to put together a presentation for the game’s new direction after which the publishing executives either give a green light or the project is cancelled. Ultimately, it’s a question of making a choice they feel comfortable with.
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