LEGO is to close down its recently launched MMO this January following failure to generate enough subscribers.
The company's Play Well Studios in Louisville and marketing team in Denmark will be axed, affecting 115 employees.
LEGO Universe launched in 2010 after a protracted development, but in February this year the company bought the majority of the development team and the rights to the game from developer NetDevil. It then proceeded to lay off members of staff.
In June this year LEGO launched a free-to-play section of the game to help drive pick-up in the title.
"The LEGO Universe team can take pride in having developed and launched a great LEGO experience that many players will miss," said Jesper Vilstrup, VP of LEGO Universe.
"Right now, we have almost 2 million players in LEGO Universe, and we get extremely positive feedback from players. Unfortunately, we have not been able to build a satisfactory revenue model in our target group, and therefore, have decided to close the game."
Despite the closure, LEGO emphasised that it intends to continue its digital games publishing business and intends to pursue deals such as those currently in place with TT Games and Warner Bros.
"The development of our digital offerings continues to be a very important element in our strategy," said Mads Nipper, executive VP of the LEGO Group.
"We have more than 20 million visitors on LEGO.com every month, and LEGO video games are among the bestselling children's video games with sales of more than 60 million units in the last five years. Through our experience developing and running LEGO Universe, we have gained a lot of valuable insights, and we have a very strong foundation for future development in the digital area."