UPDATE: Gazillion has clarified to GamesIndustry.biz that the LEGO Group has bought the rights to LEGO Universe as well as the "majority of staff" working on the project and the current offices from NetDevil, and has begun laying off a significant number of staff.
"The transition of members of our team to the LEGO Group allows us to conclude the work-for-hire segment of NetDevil's business and lets us expand our internally-published, free-to-play game businesses based on our own properties and licensed properties," commented David Brevik, president and COO.
"Gazillion is wholly focused on developing, operating, and publishing the next generation of browser-delivered games. We're proud of the LEGO Universe game that our team built, and we are certain that it has a bright future."
Those members of staff remaining with NetDevil will continue to work on Fortune Online. The fate of another NetDevil project, Jumpgate: Evolution has not been discussed.
Gazillion studio NetDevil is shedding a significant number of staff according to ex-team members.
Animator Toby Cochran detailed the moves on his blog, noting that members of the team were first alerted by posts on Facebook, and their positions officially axed by phone call later the same day.
"I personally think it's pretty terrible to find news out that way and not to be correctly notified. We all were receiving phone calls tonight and I just got mine about 2 hrs ago," he wrote.
"From what we've been told a handful of artists will be kept on board and continue working on Lego Universe. But at the moment that will be a very, VERY small team. As the count continues to rise on Facebook, they've cut over 20 people."
Gazillion Entertainment acquired NetDevil in 2008, and raised over $60 million last year, focused on building massively multiplayer games.
NetDevil recently released LEGO Universe and was working on the delayed Jumpgate: Evolution.
GamesIndustry.biz has contacted Gazillion for clarification.