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Telltale Games was scuppered by failed finance round

Sources suggest Lionsgate abandoning 'super show' project caused mass layoffs

More detail has come to light on the circumstances behind the hundreds of redundancies suffered at Telltale Games, suggesting the sudden loss of a single financial backer is to blame.

The news emerged on Friday that Telltale Games had laid off around 250 people, leaving just 25 to fulfil the company's current obligations.

Variety spoke to the studio's co-founder Dan Connors, who attributed the company's troubles to recent attempts at gaining finance.

"The company was working diligently to close a round of financing," he said. "Unfortunately, when the last potential financial backer abruptly pulled out, we were left in a position where we had no choice but to stop production.

"Sadly everyone was so focused on doing what was required to keep the company going that when the last potential partner backed out, there were no other options."

Connors was unable to reveal which backer caused such chaos, but multiple sources tell Variety that it was likely to be Lionsgate, the movie production firm that invested heavily in Telltale back in 2015.

The two companies were working together on a project that combined Telltale's interactive storytelling with live-action production, referred to as a "super show". But the project failed to materialise and Lionsgate seems to have abandoned the idea.

Various ex-Telltale staff have shared their own accounts of how badly they have been affected via social media over the past few days, many of which are echoed by Variety's sources.

Former character artist Brandon Cebenka lamented the lack of severance pay in a tweet urging developers to not work overtime "unless you're paid for it."

Meanwhile narrative designer Emily Grace Buck added in a Twitter thread that staff's healthcare only lasts one more week, that the high cost of living in San Francisco means many "were living paycheck to paycheck" and that some of the people affected only started at Telltale a week ago.

"Some of those people have children," she wrote. "At least one of them relocated cross country. A lot of the Telltale devs have families and children. And now they don't have a paycheck. Not even a severance paycheck."

If a single backer pulling support was the direct cause of the layoffs, it suggests Telltale has been in financial trouble for quite some time. The studio seemed to have secured a stay of execution earlier this year with its Netflix partnership, porting Minecraft: Story Mode to become an interactive TV show and developing a game based on Stranger Things.

While the latter will go ahead as planned, worked on by the skeleton crew remaining at the studio, Netflix has already revealed it is looking for other options to make the Stranger Things game.

Since the layoffs, the industry has rallied around those affected via the #TelltaleJobs hashtag on social media. Some publishers have even around dinners and other events to talk to former Telltale staff about potential opportunities.

Meanwhile, Variety reports that Telltale was attempting to arrange job fair and CEO Pete Hawley offered to write a LinkedIn recommendation for anyone that asked.