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Red 5 confirms lay-offs

EA claims business is "bankrupt"; report suggest The9 is new investor

Red 5 Studios has confirmed that is going through a reorganisation process that has resulted in lay-offs and voluntary departures.

Yesterday it was reported that around 30 members of staff were axed, but the company has so far refused to detail specific numbers.

"Red 5 remains committed to releasing a AAA quality, online title targeted for a worldwide release. The company has restructured the team in order to accomplish this goal. As part of the restructuring, some team members chose to part ways while others were let go. Red 5 has great respect for these departing team members and the contributions they have made," said the company.

It also confirmed that it has received new financial backing, with a report by Kotaku claiming the investment is from Chinese firm The9.

"Red 5 Studios is currently working on an unannounced massively multiplayer online game. Recently, the team formed around a new direction and took on additional investment from a strategic partner in the online games industry," said Red 5 in a statement.

In a twist to the tale, EA's Jeff Brown claimed the company is "bankrupt", taking the opportunity to further embarrass Benchmark Capital's Mitch Lasky – which invested $18.5 million in Red 5 in 2006 – after the former exec claimed the Madden publisher was in the wrong business.

"Now that Red 5 Studios is bankrupt, Mitch Lasky can devote more time to giving business advice on his blog," he told Gamasutra.

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Matt Martin avatar
Matt Martin: Matt Martin joined GamesIndustry in 2006 and was made editor of the site in 2008. With over ten years experience in journalism, he has written for multiple trade, consumer, contract and business-to-business publications in the games, retail and technology sectors.
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