Update, May 24: We Happy Few's developers have issued a statement about Australian Classification Board's decision to not rate the game, but the board are standing firm.
We Happy Few has been refused classification in Australia due to its portrayal of drug misuse. The game tasks you with surviving without use of the fictional hallucinogenic drug Joy, which NPCs take to attempt to forget a shared trauma.
In a statement, the game's developer, Compulsion, said that the game "explores a range of modern themes," and offers a "social commentary no different than Aldous Huxley's Brave New World or Terry Gilliam's Brazil."
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The studio also said they were working with the ACB to achieve a classification, but will work with Kickstarter backers and issue refunds if the board maintains its stance. You can read the full statement, which asks backers for "a little bit of time to appeal the decision," via a blog post from Compulsion.
Despite Compulsion's efforts, however, it seems that the ACB will not be issuing a classification at this time. In a statement provided to PC Gamer (the statement in its entirety contains some minor story spoilers) last night, the board stated that "in the board's opinion, the game's drug-use mechanic making game progression less difficult constitutes an incentive or reward for drug-use and therefore, the game exceeds the R 18+ classification that states, 'drug use related to incentives and rewards is not permitted', Therefore, the game warrants being Refused Classification."
The classification does not rule out an Australian release for We Happy Few in the future: developer Compulsion Games could make changes to remove the offending content and resubmit it to the board for reclassification. Considering the Joy drug is central to We Happy Few's gameplay and story, it won't be an easy fix.
We Happy Few launched into Early Access on PC last year, but it is unknown whether this setback will have an affect on the expected summer release this year.