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Telltale Games could have been saved by AMC, Smilegate deal

But both firms reportedly pulled out the day before the studio was forced to lay off 90% of its staff

The story of how Telltale Games collapsed last week continues to develop as new information suggests the developer was on the cusp of a partnership that could have prevented mass redundancies.

Yesterday, it was reported that the firm's woes stemmed from the pulled support of a single financial backer, as claimed by co-founder Dan Connors. However, Variety now reports there were two other prominent firms involved that Telltale was hoping to work with.

Sources have told the site that both Korean developer Smilegate and US TV firm AMC were in talks to invest in Telltale Games. The former is best know for online and mobile games, while the latter owns a variety of IP, including the rights to The Walking Dead television series (Telltale's Walking Dead games are actually based on the original Robert Kirkman comic books).

It's unclear whether these negotiations centred around funding or potential projects, but the management reportedly told its employees on Thursday that discussions with AMC were going particularly well and funding was expected to be confirmed within a few weeks.

However, later that afternoon one of the companies is said to have backed out, followed by the other just hours later.

Variety maintains that film production firm Lionsgate also pulled its support, having invested in Telltale back in 2015 and agreed to work on a "super show" that combined the studio's interactive storytelling with live action footage.

With both AMC and Smilegate no longer interested in investing in Telltale, the studio was compelled to dismiss 90 per cent of its workforce the following day, trimming down to a team of just 25 people that will finish the port of Minecraft: Story Mode for Netflix.

The unexpected redundancies have landed the studio in legal trouble for violating the WARN Act (Worker Adjustment and Retraining Notification). One former employee has even filed a lawsuit against the studio for terminating him and his colleagues without warning or severance pay.