Argonaut's future hangs in the balance

The Sheffield studio of embattled British development group Argonaut has shut its doors, with the future of the company as a whole uncertain as it seeks a way out of serious financial difficulties.

The closure comes following a wide-ranging round of layoffs and the suspension of Argonaut's shares on the London Stock Exchange a week ago, when it emerged that the firm has still failed to sign several crucial development contracts.

Over 50 staff are known to have been laid off in the first round of redundancies; they are now joined by the staff from the Sheffield studio, which was formerly known as Particle Systems prior to its acquisition by Argonaut, and most recently worked on Powerdrome.

The status of Argonaut as a whole remains unclear today. It appears that the company has not been put into administration, as was previously reported by a number of media sources, but that the firm is actively attempting to sell off its teams and studios as going concerns.

Hopes have been raised for successful management buyouts of some portions of the company, including Cambridge-based studio Just Add Monsters, which most recently developed the critically acclaimed Kung Fu Chaos and is currently working on a graphically stunning next-generation title which is believed to have attracted significant interest from publishers.