Critical Failure Studio

Critical Failure Studio is an independent Chilean game developer and middleware creator founded in 2017 by Carlos Ibañez and Ninoska Vasquez. Based in Santiago, it combines story-driven game production with the development of tools for other game makers, particularly those working with 2D animation in Unreal Engine.

Its work spans game design, programming, art and engine integration. The studio develops adventure and puzzle-platforming experiences alongside technical systems that support their production, including animation pipelines, physics, water shaders and displacement simulation. Its engineering capabilities include C++ and Blueprint integration, plugin architecture and engine-level optimization.

Games and development tools

PaperZD is the studio’s animation toolset for Unreal Engine 4 and Unreal Engine 5. It provides animation graphs, state machines and event notifications for 2D workflows, addressing limitations in the engine’s native animation pipeline. The tool originated in the studio’s own game production needs and developed into middleware distributed to other developers through itch.io, the Unreal Engine Marketplace and Epic Games Fab. The studio continues to maintain and distribute it.

Lost Fragments is its hand-drawn, atmospheric 2D puzzle-platforming adventure, in development and listed on Steam. The project explores dual realities and memory realms, combining narrative development with environmental puzzles. It grew from an earlier prototype called Lost Forest, connecting the studio’s game-making ambitions with the technical experimentation behind its tools.

The studio also publishes technical development writing about its production process. Its water-shader tutorial series documents research undertaken for Lost Fragments, illustrating how work on an individual game informs its broader engineering practice. Alongside its own projects, Critical Failure Studio offers full-cycle game development, middleware creation and the integration of 2D tools into Unreal Engine projects.