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The Walking Dead developer Telltale Games reportedly lays off the majority of its staff

UPDATE: Telltale responds.

UPDATE: Following reports of significant lay-offs at Telltale Games and potential closure of the studio, the developer has now responded in an official statement:

"Today Telltale Games made the difficult decision to begin a majority studio closure following a year marked by insurmountable challenges. A majority of the company's employees were dismissed earlier this morning, with a small group of 25 employees staying on to fulfill the company's obligations to its board and partners."

In the same statement, Telltale's CEO Pete Hawley said, "It's been an incredibly difficult year for Telltale as we worked to set the company on a new course. Unfortunately, we ran out of time trying to get there. We released some of our best content this year and received a tremendous amount of positive feedback, but ultimately, that did not translate to sales. With a heavy heart, we watch our friends leave today to spread our brand of storytelling across the games industry."

The company says it will "issue further comments regarding its product portfolio in the coming weeks".

ORIGINAL STORY: Telltale Games, the developer known for episodic narrative series including The Walking Dead and The Wolf Among Us, has laid off a significant percentage of its workforce, according to reports, and may face closure.

News of layoffs at the company first began to circulate earlier today via social media, with some Telltale staff - such as narrative designer Emily Grace Buck - announcing that they and their colleagues no longer had jobs at the company.

Since then, a report from The Verge, compiled from multiple insider sources, has claimed that a skeleton staff of 25 people will remain in work at Telltale for the time being, with all other employees dismissed with no severance pay. Sources had earlier told USgamer that the studio's "closure was going to be complete", although no official word has been forthcoming.

Telltale's The Walking Dead series in 2012 was the studio's first big hit.

Telltale's co-founder and former CEO Kevin Bruner (who sued the company earlier this year) commented on today's reports via his personal website. In a post titled Telltale Closure, Bruner said he was "saddened for the people who are losing their jobs at a studio they love. And I'm also saddened at the loss of a studio that green-lit crazy ideas that no one else would consider."

Telltale was founded in 2004, and quickly began specialising in episodic narrative games. Early on, it developed new entries in classic LucasArts series, such as Monkey Island and Sam & Max, before having its first big hit in 2012, with the inaugural season of its The Walking Dead games. Series based on major properties including Minecraft, Batman, and Game of Thrones followed.

Early Telltale games included new entries in classic LucasArts series.

Last November, Telltale Games laid off 90 members of staff, around 25% of its workforce, claiming that the redundancies were part of a "comprehensive company restructuring" designed to deliver "fewer, better games with a smaller team". Following that news, reports surfaced highlighting toxic working conditions at the company.

Since then, Telltale Games has announced a collaboration with Netflix to create a game based on Stranger Things, and a second season of The Wolf Among Us was also in the works. Sources told USgamer that both of these projects are now effectively cancelled.

Telltale is currently halfway through the release of its four-episode final season of The Walking Dead. As yet, there's no word on how this might be affected by today's news. I'll update this story as more details come in.