Ian Bell, head of UK studio Slightly Mad, has told GamesIndustry.biz that there have been job losses at the studio, thanks to an unannounced project falling through before production.
Earlier this week, Bell announced the foundation of a new studio, Gamagio, which will focus on mobile and social titles.
That new project had been on the cards for some time, but the falling through of the new project catlysed the decision. Several staff who were previously at Slightly Mad have now been employed at Gamagio.
Essentially we were let down at the last minute by one publisher who we'd signed a deal with only for it to be canned before we even started.
Ian Bell, Slightly Mad Studios
"As you probably know we have just completed Shift 2 for EA," said Bell. "It's reviewing well and it's a great product but we haven't been able to secure a deal for a new project... yet. Therefore I have told our staff that we may need to make some cuts and that we are in the process of getting more work in.
"Essentially we were let down at the last minute by one publisher who we'd signed a deal with only for it to be canned before we even started. I can't say who. We are however still talking to them and a number of other publishers and are very optimistic for the future.
"Gamagio was something I have been thinking about doing for a while but on a much smaller scale. When the 'next' project got cancelled I decided that we had this great team of people and even if I did have to make cuts they'd have a job for the time being and so it made sense to utilise them.
"So, as well as talking to publishers about a AAA console title I'm also raising finance for the new venture. The quality of the team we have means we have the potential to make something truly awesome in the casual and social space and I am excited about the opportunities."
The failure to land a new project came as something of a surprise to Bell and fellow founder Andy Garton, who believed that solid review scores and decent sales for Shift, alongside their satisfaction with the recently completed sequel, would see more offers of work forthcoming.
"Being a AAA studio means that you are normally reliant on third party publishers, of course. If you'd asked me earlier this year or late last year when we were finishing off Shift 2, and had publishers literally queuing up to speak to us and were turning them away because we had our next project signed and, I thought, secured I would have said 'no'.
"Now though, publishers are making different decisions because consumers are making different decisions. The market has changed but I am surprised by the decisions some publishers are making."
Unbowed by the redundancies, Bell is still confident in the future of both Slightly Mad and Gamagio.
"Shift 2 is even better and is reviewing very well (from what I've seen) and both have been great platforms for us to show what we can do. However we all feel that we have a lot more to give and are only really starting to show the true potential of the studio.
"We're optimistic. Its a tough marketplace but we are much better placed than many other developers with a great team, great tech and a great strategy.
A full, premium profile listing for Slight Mad Studio is available to view on the GamesIndustry.biz Global Business Directory.