Smalland 2: Lost Realms announced for Xbox Series X|S with overhauled crafting, creature companions, and swimming

Maximum Entertainment Studios has officially announced Smalland 2: Lost Realms, a follow-up to Smalland: Survive the Wilds, launching later this year on Xbox Series X|S. Lead Game Designer Diana Carullo broke down the key changes in a developer blog, and the sequel is shaping up to be a significant overhaul rather than a simple expansion.

The game is built on Unreal Engine 5 and takes place long before the events of the first game — a world before the Giants arrived, where you explore new lands and cultures as one of the Smallfolk. The world itself is now split into distinct realms with region-specific resources and creatures, replacing the unified open world of the original. Water is a major new element: swimming is now a fully supported mechanic, and crossing bodies of water unlocks new lands and creatures — something the community had been asking for. Creature companions have also been reworked from the ground up. In the first game they functioned essentially as tools; in Smalland 2 you bond with them, care for them, and build a party that uses their individual abilities to support you. Neglect them and they'll leave. Crafting has been overhauled too — the old linear progression system is gone, replaced with a more freeform approach where combining ingredients with different properties lets you craft what you actually need rather than following a fixed upgrade path.

Smalland: Survive the Wilds launched into Early Access on PC in 2023 and built a dedicated community around its tiny-scale survival gameplay — think Grounded but with a Norse-tinged aesthetic and a heavier emphasis on creature taming. The sequel looks to keep that core loop while addressing the main criticisms of the original: limited world variety, shallow companion systems, and a crafting tree that didn't leave much room for player expression. Moving to Unreal Engine 5 also suggests a meaningful visual upgrade, though no direct performance targets or resolution modes have been detailed yet.

No specific release date beyond "later this year" has been confirmed, and the announcement currently covers Xbox Series X|S only — PC and other platforms haven't been mentioned. Given the original launched on PC first, it's worth watching whether a Steam release follows. Community reaction to the announcement is likely to focus on the creature companion rework and swimming, both of which were recurring requests from the Smalland player base.