The "disastrous" launch of turn-based fantasy game Elemental: War of Magic forced layoffs at publisher Stardock.
"Technical issues" at launch led to poor reviews and sales, Stardock CEO Brad Wardell told Joystiq.
"Elemental's revenue was anticipated to provide the revenue both for our main games team's next project as well as a second team," Wardell wrote in the Elemental forum.
"Unfortunately, that is unlikely to happen so we've had to start laying people off.
"No one is being fired. None of these people did anything wrong. Stardock is a small company and each person here is truly amongst the best and brightest. So you can imagine how much it sucks for all of us to lay off anyone.
"We haven't had to lay anyone off since our migration from the OS/2 market in 1998. It would be great if we can bring as many of these people back over time if the studio can afford it.
"No one involved on the core components of Elemental is affected.
"Elemental's rocky launch can be summed up (IMO) as follows: Our QA process was insufficient to handle a brand new platform (Elemental = Kumquat 1.0 versus say Galactic Civilizations II was using Pear which was the same engine, modified, from 1997's Entrepreneur) + my own catastrophic poor judgment in not objectively evaluating the core game play components."
In October last year Wardell warned Games for Windows - Live will collapse if Microsoft continues to let the Xbox team hack away at it.