Def Jam Rapstar developer 4mm Games is set to close its doors after being unable to overcome poor game sales and an $8million lawsuit from EMI.
As reported by GI, studio founder Jamie King said the company was “starved for money” and was unable to gain new funding whilst the lawsuit with EMI over the use of unlicensed music was underway.
As a result, he said staff had already left the studio to work elsewhere.
"We have not got any new funding and obviously we need to resolve everything with Rapstar. And we've also got to eat," said King.
"I get very annoyed at times, I would like there to be a way out of it but I don't know if that's going to happen."
4mm Games’ problems emerged after the expensive development of HipHop karaoke title Def Jam Rapstar, which released in 2010 to poor sales and received an average rating of 75 on Metacritic.
Starting out as a Wii title, the game became a multiplatform title, with added DLC and online features such as allowing users to upload their performances online for others to rate.
King said that the studio was unable to create its own peripherals to meet its ambitions, and was knocked back when it approached Sony and Microsoft to take advantage of their tech, even being refused as a launch title for Kinect.
"We tried very hard to get technology in there that would drop out someone's living room background without having to have a bundled green screen,” said King.
“We looked at a few different technologies but none of them were quite there. We couldn't make any of our own peripherals, which was frustrating, and we had to rely on existing peripherals. We weren't allowed by Microsoft and Sony.”
After release, planned DLC for the game was cancelled and the community website was closed without explanation.
King added that he believed the studio needed a longer timeframe to achieve its ambitions with Def Jam, but did not have the funding to make the game a success.
"We didn't get to achieve the grand plan. We had very high hopes for it, but it needed deeper pockets and a five-to-ten year vision,” he explained.
“Karaoke music games have a long tail but we didn't have any control over it when it was published and we couldn't do anything about support on the website.
“It broke my heart when it just got turned off. It didn't get the love, there were no community managers, the videos were taking a long time to get rated. It's business, I get it, we were very ambitious with the amount of funds that we had."