A four-episode series inspired by Krahulik and Jerry "Tycho" Holkins' game-centric webcomic, Penny Arcade Adventures: Episode 1 debuted on PC and Xbox Live Arcade in May 2008, followed by a PlayStation 3 release and then Episode 2 in October 2008.

Back at GDC 2010, developer Hothead revealed that sales of Episode 2 were roughly one-third those of Episode 1, but that it still planned to complete the series.

"Hothead has DeathSpank and they have a chance to do something really cool with it," explained writer Holkins. "I think they could've made DeathSpank and Episode 3 but...I know [Episode 3] would have suffered...we'd rather not do it than do it half-assed."

However, that doesn't mean the storyline of Penny Arcade Adventures will go unresolved. "We're going to finish that story but it's going to be on our website," Holkins added. Our main goal at this point is to make sure that people aren't left hanging on a narrative side, and to allow Hothead to do the best they can on their project."