Various sources have indicated to GamesIndustry.biz that TRC Family Media, a development studio based in Malta and fronted by ex-Sony Computer Entertainment head Chris Deering, has foundered, leaving staff unpaid for several months and forcing at least 90 per cent redundancies. Sources say that no staff remain in a production capacity at all.
TRC's main project was Wishingtooth, an interactive sotrybook IP which came to both iOS and Android.
A copy of an internal mail sent to employees, obtained by GamesIndustry.biz, indicates that the move came as a total surprise to many employees.
"As your employee representative, I have just been informed that due to the Company's financial situation, TRC Family Entertainment Limited is unable to provide work for all of its employees and may have to make redundancies in accordance to the collective redundancies regulations (LN 428 of 2002).
"At present the Company anticipates that it will have to make all current employees redundant except to a small executive team, creative head, a small Finance Team and the HR & Admin Team. If this is the case, everyone will be informed of their notice period in due course.
"At present the Company anticipates that it will have to make all current employees redundant except to a small executive team, creative head, a small Finance Team and the HR & Admin Team"TRC internal email
"I should stress that no final decision has been made as to whether each and every one of you will have to be dismissed for redundancy and over the next thirty days the Company will continue to try to identify ways in which this collective redundancy can be avoided.
TRC was founded to great fanfare in Malta in 2011, planning to employ over 100 people within two years on the production of an MMO project for children. Deering took a place on the board and quickly became a figurehead, even earning the title of Malta's Special Envoy for Gaming.
Malta's government, keen to court the potentially lucrative industry, purchased a 15 per cent stake in the new venture for €4 million.
Now the company seems to be in its death throes, with a skeleton staff of management overseeing a running down of its operations.
According to a recent interview with chief executive Paul Taylor by the Times of Malta, the collapse was brought about by a gap in funding from lead investor Euphoria. In that article, Taylor says that the "majority" of staff have been made redundant, but hopes are that they can be re-employed once funding is secured.
"TRC Family Entertainment Ltd has temporarily interrupted development activity," Taylor told the Times of Malta. "The board of directors has taken the strategic decision to contain ongoing costs while pursuing urgent resolution of the matter, which, due to the current situation, means that the majority of staff must be released with the goal of rehiring once the contracted funds are received."
"TRC Family Entertainment Ltd has temporarily interrupted development activity"Paul Taylor, CEO, TRC
However, sources from the studio paint a bleaker picture, with some claiming that they're still owed wages from as far back as May and that redundancy packages remain unfulfilled. As many of the staff moved to the studio from abroad, they see no hope of re-employment and, having burned through savings in order to relocate, both to Malta and back home again afterwards, are facing a grim situation.
"Like others that resigned before the redundancies I have over two months wages that have not been paid," said one ex-employee, who wished to remain anonymous. "Despite the redundancies the directors are still confident they will receive the necessary funds and rehire.
"I will say the founders had huge, unrealistic ambitions and didn't know how to achieve them. They wasted millions of euros over three years with not a cent of revenue, let alone any profit. This situation was inevitable."
Originally when we did not get paid we were told it was a banking error and we would get paid the following day," said another ex-employee. "Then we were told that it would be after the weekend. It was only after this did not happen that we were told that Euphoria, the company getting investment for TRC, had failed in sprucing investment for the company.
"I will say the founders had huge, unrealistic ambitions and didn't know how to achieve them. They wasted millions of euros over three years with not a cent of revenue, let alone any profit. This situation was inevitable"Ex-TRC employee
"However things looked strange as when people looked into Euphoria they were on the strike-off list, as they had not submitted paper work to the Irish government in regards their trading for the year. We were told that this was nothing to do with the current issue. However now TRC has been listed as no longer trading, so it looks like we may have been lied to about the situation.
"We where also told that we would not go into July without a payment from Euphoria and that July was safe as The head of Euphoria had made a guarantee that he would meet payments, it was then that people realized that the head of Euphoria is also one of the board members of TRC."
Reviews of the company from GlassDoor are somewhat mixed, but sources, and some of the GlassDoor comments themselves, indicate that management was also putting pressure on employees to leave positive feedback to balance out the bad. Many have indicated that they see no expectation of receiving monies owed and criticise the remaining management's attempts to give the impression that the business can and will survive.
The company's misfortunes mark a mixed period for Malta's development community, which has burgeoned over recent years. UK studio Exient opened an office on the island earlier this year, with Ukrainian studio 4A also opening shop there in May after the ongoing conflict in its homeland made business a very dangerous prospect indeed. 4A's latest, Metro Redux, topped the UK charts this week.
Additional reporting by Matthew Handrahan