Funcom is to focus on smaller online games in future following the disappointment of its recently released MMO The Secret World.
In its latest financial report, the studio said sales of the game had been less than half of what was expected, with just 200,000 consumers purchasing the title.
It blamed press feedback from some media outlets in the US for poor sales, with some rating the game around 50 per cent.
Funcom also cited the release of Guild Wars 2, Diablo III and the upcoming World of Warcraft expansion Mists of Pandaria as a reason for a low take-up.
The developer also confirmed it was undergoing large cost-cutting measures with more than 50 per cent of its staff set to be laid off.
“The Company will concentrate its new development on more focused, systems-driven games that have a high degree of community and player interaction,” read a statement from the company.
“These games require less time and development cost to bring to market.”
Funcom also stated that under current revenue forecasts it would be able to meet its financial obligations, but warned investors however of potential risks from factors “outside of the studio’s control”, such as the impact of a rival game.
Second quarter revenues for Funcom were down to $2.6m from $3.1m during the same period in 2011.