Me and my friend have the same issue. We 'fixed' it by following these steps:
- Launch the game as normal.
- My friend needs to be the one who creates the Lobby.
- Ready up and play as normal.
- To play another match we both must exit the game and relaunch It via Epic's Launcher.
(I.e. we can't connect to each other again even if we sucessfully played a game.)
We also suspected that It could perhaps have something to do with our settings. For a while it seemed to help if both of us create a Multiplayer Lobby and start a 'dummy match' against one AI opponent and connect to each other afterwards. We didn't figure out that it actually had more to do with my friend being the one who needed to create the Lobby. In other words, the settings I tried changing on my end didn't seem to have any impact at all.
We can both connect to our third friend with no problems but I sometimes get a massive ping and delay since he's just hot-spotting his phones connection to his PC. That's not the games fault but our third friend do not have VPN software installed or things of that nature, so I still assume that there is something weird on my end.
A question to you Märkä: Could you sucessfully play the game before the latest update?
I think we could, which makes it difficult to troubleshoot but I can't confirm this 100%.
To devs who might want to additional information:
Since I could connect to him and not the other way around my assumption was that it could be something on my end.
Both of us use VPN's and we can connect to each other with it turned on, no problems. But we did try turning it off, I checked all my firewall settings to make sure everything was setup correctly and I want to point out that after the latest update, I did get that Windows Defender Firewall screen asking me If I would allow Offworld in my firewall. It seemed odd, maybe because It was recognized as a new game entirely?
Here's a screenshot from WDF.

Note: Yesterday I only had two entries for Offworld. One ticked for private and the other for public. I know it's common for programs to have multiple entries, and the added ones could have to do with me reinstalling and resetting my network drivers, VPN and every program related to networking. (cFoss, NetLimiter, Mullvad VPN.)
Here's a list of what I tried changing:
- Uninstalled NetLimiter and cFoss.
(I Uninstalled via 'Geek Uninstaller' removing all traces and .reg entries also making sure that all of the configuration files was deleted from NetLimiter.)
- Checked my router configuration.
(I hadn't changed anything from default but I wanted to make sure.)
- Allowed Offworld via Windows Defender Firewall.
(Thinking back, I'm not a 100% sure If I ticked the box to the left off 'offworld' but I have never changed these settings in the first place.)
- Went to my motherboard manufacturers download-page and made sure to have the latest Intel LAN driver (v. 23.5.2) followed by uninstalling and reinstalling the drivers.
(We did try connecting while the default generic Windows driver was installed before reinstalling the Intel LAN drivers.)
- In Epic Games Launcher:
(Settings > Troubleshoot: No connection issues to any services.)
- Made sure (to my abillities) that my VPN was off.
(And so did my friend. It didn't seem to impact anything.)
I think that's it.
I'll try seeing if my third friend is able to connect to me and report back if that's the case. If devs figure out what the problem could be related to I propose a way to check if players are able to host games since it's p2p. It seems more like a bug though considering me and my second friend can't simply remake and play a new match without restarting Offworld first.
Went all out on this, it would be a shame to complain when the price was free.
Game is dope!