Telltale Games begins wave of layoffs, cancels Stranger Things game [Updated]

Update, 5:49 p.m. ET: Telltale Games has issued a statement to Ars Technica confirming that the game maker has begun taking steps to shut down completely. The full statement, below:

Today Telltale Games made the difficult decision to begin a majority studio closure following a year marked by insurmountable challenges. A majority of the company’s employees were dismissed earlier this morning, with a small group of 25 employees staying on to fulfill the company’s obligations to its board and partners. CEO Pete Hawley issued the following statement:

“It’s been an incredibly difficult year for Telltale as we worked to set the company on a new course. Unfortunately, we ran out of time trying to get there. We released some of our best content this year and received a tremendous amount of positive feedback, but ultimately, that did not translate to sales. With a heavy heart, we watch our friends leave today to spread our brand of storytelling across the games industry.”

Original report:

A wave of layoffs has apparently hit the video game studio Telltale Games, responsible for popular branching-narrative games based on the Walking Dead franchise. According to online reports, those affected by the layoffs have alleged that the studio is either shutting down entirely or staying afloat as a meager skeleton crew, ahead of The Walking Dead: The Telltale Series‘ final season launch throughout this fall.

On Friday, independent reporter Andrea Ayres posted an allegation that the studio had shut down, based on feedback from a game-development Facebook community that simply said, “Telltale Games is closing their doors.” Shortly afterward, Telltale narrative designer Emily Grace Buck confirmed that she does “not have a job anymore” and added that she was looking for job opening information for “a lot of other amazing people I love dearly.”

After Gamasutra reported on the story by saying Telltale was “closing its doors,” The Verge followed up to indicate that a team of 25 staffers will remain on board—perhaps to usher the company’s remaining Walking Dead episodes to launch. USGamer separately reports that a new game in Telltale’s The Wolf Among Us series, and a previously announced series based on the Netflix show Stranger Things, have been canceled.

Shortly after these stories went live, Forbes reporter Joe Parlock offered his own synthesis of today’s Telltale news as follows. The studio’s remaining crew of roughly 25 staffers will stay on board until this final season of The Walking Dead is complete, at which point the studio will shutter due to “bankruptcy.” This will affect the studio’s recent push into publishing other studios’ games, Parlock writes. Part of the company’s financial trouble, he says, is due to the previously unannounced news that the studio’s deal with Netflix (and thus the Stranger Things license) fell through earlier this year.

Telltale Games rose to prominence in 2012 after its first Walking Dead season launched to critical acclaim. The developer followed that launch with licensed, narrative-heavy games based on properties like Batman, Minecraft, Borderlands, and Game of Thrones. Before those games launched, the studio worked its magic on classic point-and-click series like Sam & Max.