Just four months after Midway Games acquired Adelaide-based developer Ratbag, renaming it Midway Australia, the publisher has shut the studio down in a move that leaves more than 70 people jobless.
According to the Adelaide Advertiser, Midway's senior vice president, Matthew Booty, was on hand to deliver the news in person. Staff were said to be "stunned" at the announcement.
It's thought that company founders Greg Siegele and Richard Harrison, who established Ratbag in 1994, met privately with Booty in an attempt to reverse the decision - but to no avail.
Ratbag is best known for producing a series of successful racing games, which began with Powerslide in 1998. Midway acquired the developer in August with a stock transaction for just under 420,000 shares in a deal worth USD 7 million, and the studio was working on several unnannounced products for both current and next-generation systems. Midway declined to comment on the closure.
It's been a difficult year for Midway - last month the company was forced to revise its financial forecast following Q3 losses. Net loss was estimated at USD 29 million - USD 10 million higher than an August forecast suggested.