Defiant Development will no longer make games, after nine years as one of Australia's most important independent studios.
In a post on Facebook, Defiant founder Morgan Jafitt announced that the studio would have to close, and that its entire team is now looking for new opportunities.
Defiant was founded in 2010, after a few years in which the Australian games industry collapsed as major publishers and investors withdrew from the region following the global financial crisis in 2008.
"In 2010, Australia desperately needed studios to demonstrate that it was possible to have substantial, Australian owned, IP generating homes for talent," Jafitt said.
"That there could be a studio model in Australia that would thrive without being dependant on international ownership. That Australian studios could make console games again.
"Nine years later, there is no question that is true, and there are many Australian studios old and new demonstrating that Australian game development is truly world class."
Defiant will not be one of them moving forward, however. Jafitt emphasised that the studio was "focused on creating games nobody else would," and in doing so was always taking a risk.
"When it succeeds it delivers things you could never have considered possible. When it fails, it leaves you without a safety net," he said. "The games market has changed in ways both big and small in the nine years we've been in business. We have not been able to change quickly enough to continue with them."
Defiant was best known for the Hand of Fate franchise, but it was also working on a new game, which had the working title The World in My Attic. However, work on that project will not continue, as the studio will only "continue in caretaker mode to support our existing products."
The Australian games industry is far healthier now than when Defint was founded, though this year has brought mixed fortunes.
In February, around a quarter of staff were cut at EA FireMonkeys, one of the biggest studios in the country, while May saw a pledge to reinstate the $25 million Interactive Games Fund. However, it was an election promise made by the losing party, so that investment will not be available to the Australian industry.