Koch Media has closed its Deep Silver Vienna studio, a studio that was formed in 2006 from former Rockstar Vienna employees.
Since its conception, which begun under the name Games That Matter, the studio was acquired by Koch and released its first and only game, Cursed Mountain on Wii, in conjunction with Austrian developer Sproing Interactive last year.
Speaking to site ORF.at, a Koch spokesperson said "this decision is not easy for us." Given the current economic situation it has become necessary to further optimise processes - a consequence of which has been redundancies, they added.
The studio was originally set up by former Rockstar Vienna managers Hannes Seifert and Niki Laber, who planned to concentrate efforts on developing full priced titles for consoles.
According to reports, Laber left the studio in mid-December and Seifert will take up a position as creative director at Square Enix in mid-February.
The closure affects approximately 20 developers that had been employed by the studio, some of which may be found new positions within its Munich headquarters, said the company.
Koch said that development of Ride To Hell, which was being worked on by the studio alongside UK studio Eutechnyx, will be shifted to a team based in Munich.
An official statement from Koch is expected later today.