British independent developer Elixir Studios has announced that it has commenced winding down its operations after a key title was cancelled, but efforts continue to rescue some of the firm's projects.

All of the company's staff will be laid off by the end of the week, although some will continue to work for the firm on a freelance basis, and full redundancy packages will be paid to all employees.

"The important thing to us is that we're in control of our own destiny," Elixir CEO Mark Hewitt told GamesIndustry.biz this morning. "We won't just run up against a brick wall like some developers have. We'll still have money in the bank when we close, we'll treat our staff as they should be treated and help them to find new jobs."

The closure of the studio should also have no bearing on Republic Dawn, the massively multiplayer title which was being co-developed by Elixir and Cambridge-based MMOG experts Nicely Crafted Entertainment, according to Hewitt.

"We were giving technical advice to them on their project, as opposed to any other support," he explained. "We'll still be able to provide that technical advice, and that project should be unaffected."

Elixir was founded seven years ago by Demis Hassabis, and has had two published games - political simulation Republic, which was published by Eidos, and last year's well-received strategy title Evil Genius, published by VU Games.

"I'm very proud of what all the staff at Elixir have achieved and the games we produced," Hassabis said in a statement this morning. "We gave it everything we had but ultimately it wasn't quite enough. It seems that today's games industry no longer has room for small independent developers wanting to work on innovative and original ideas. Perhaps there is no longer any need for them."

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