A significant number of staff at Californian developer Red 5 Studios have been made redundant, sources claim.
The studio, founded by ex-Blizzard staff, was said to be working on an MMOFPS project before money troubles allegedly hit the outfit.
Now the group has cut over half its workforce and put its project on hold, sources told consumer site Kotaku, while the studio was rescued from closing completely by an unnamed buyer.
Develop has approached Red 5 Studios for clarification on the matter.
Around thirty staff are said to remain. Last year the firm was said to be employing 100 staff across two studios, one in California and the other in Shanghai. The fate of both studios is now a matter of speculation.
Red 5 was established back in 2005 by three former Blizzard employees – Mark Kern, William Petras and Taewon Yun – while its MMOFPS project was thought to have received substantial funding after securing an $18.5 million investment from Benchmark Capital and Sierra Ventures.
According to the unnamed source, Red 5’s MMOFPS project has been suspended as a “skeleton crew” shifts its focus to another project, this time targeting the Chinese market.