Backbone Entertainment is on the verge of shutting down, according to IGN. Citing a pair of sources at the studio, the website reports that the Emeryville, California-based developer instituted a round of layoffs recently, with a complete closure still possible.
Even if the studio does survive, it may not resemble its current form. One of IGN's sources said that if it can avoid outright closure, Backbone will "keep it going smaller."
Perhaps best known as the developer behind the Death Jr. franchise, Backbone also earned a reputation for porting older games onto new platforms. The studio was responsible for bringing Marvel vs. Capcom 2, X-Men: The Arcade Game, and The Simpsons: The Arcade Game to the current generation of platforms, and has also developed retro compilations for Sega, Midway, and Atari. Its latest project, Midway Arcade Origins for Xbox 360 and PlayStation 3, is scheduled to hit stores next month.
UPDATE: Backbone parent company Foundation 9 confirmed the layoffs for GamesIndustry International and provided the following statement from CEO James North-Hearn:
"I regret to announce a round of layoffs at Backbone Entertainment. The studio will continue to operate at a reduced size and will honor its commitments to existing partners.
"Due to a lower demand for conventional console development, the studio has made some difficult but necessary adjustments in both its capacity and services, with the goal of matching the changing needs of today's market. The dedicated development staff at Backbone has put together some of the studio's best work for our partners in the upcoming fall releases, Dance Central 3 and Midway Arcade Origins. I would like to publicly thank the departing members for their incredible service to the company. All of us at Foundation 9 are sorry to lose them and we're here to help them to a soft landing. We wish them well in their individual pursuits."