Independent UK developer Outerlight, behind the recent Bloody Good Time and The Ship, has lost its staff and premises within weeks of its last release.
"Outerlight has all but been dissolved," co-founder Chris Peck told BigDownload.
"The team and the office are gone, all that remains is myself working unpaid in the hope to recoup some royalties from the game.
" At the moment, the life line for the company is ongoing Ship sales, which have meant we can keep trading until we hopefully see some BGT royalties."
Peck was critical of publisher Ubisoft's role in the title, having signed up with the French firm due to making a loss on former project The Ship.
"While I have never met a developer who has a good thing to say about a publisher," he said, "I was still hoping that it would be a lot more of a co-operative venture, taking the best of Outerlight, and the best of Ubisoft, and combining them.
"On a positive note, I can say they had an excellent QA team in Romania."
Peck lamented not self-publishing PC multiplayer Bloody Good Time, though felt securing investment would have been too difficult.
"The traditional publishing model is awful for developers, it's their gilded cage. It requires costly pitching, to emissaries of publishers, who return to corporate rooms & badly pitch the idea to large groups who need consensus to act, and typically take 6 months to close any deal they offer.
"Publishers are motivated by greed, but restrained by fear of risk, and thus seek sure deals, licenses and sequels, which makes pitching innovation almost pointless. Should you get a deal, the usual is 20 percent royalties, but after the retailer takes their share of 50 percent, you are getting 20 percent of the 50 percent left (so 10 percent of retail price).
"That doesn't sound too bad, until you realise that the developer is the one that actually pays for the development, the publisher has just advanced the developer their share of the royalties to pay for making the game. [While] a publishing deal seems like a lifeline, it's more like a shackle with a death sentence at the end."
He hoped Bloody Good time might yet earn enough royalties to put Outerlight back on its feet, and claimed the studio remained a worthwhile investment prospect.