This past weekend, Telltale Games made the shocking announcement that the studio was closing down, retrenching all but 25 employees to continue running the company while the liquidation process gets underway, and is unlikely to finish work on The Wolf Among Us 2. The news has been devastating to the gaming industry, especially because there was no indication that a shutdown was imminent. Just hours before the announcement went public, former employees at the company tweeted about being told that they would be losing their jobs, and several others were highlighting that they were not being offered severance packages. It’s the end of an era, and likely the last we’ll see of this once great studio.
In recent months, Telltale has shown signs of some financial strain. In 2017, the studio retrenched 25% of its workforce in order to meet financial targets, and in June 2018 co-founder and former CEO Kevin Bruner sued the company for damages and lost income. A report by The Verge detailed how many employees were being overworked in order to meet deadlines and ship games out on time, and it’s clear now that Telltale’s management was pushing hard to meet release dates so that the company could be paid on time. Remember, this is the same studio that gave us the Sam and Max series, along with the excellent The Walking Dead series, a Game of Thrones adaption, and Tales from the Borderlands. That there could have been financial problems wasn’t unthinkable, but this was the darling of the games industry to many.
— Telltale Games (@telltalegames) September 21, 2018
According to unconfirmed reports on Twitter, the studio’s various franchises may also have not been tremendously profitable. It is rumoured that only the first season of The Walking Dead, along with 7 Ways to Die and Minecraft: Story Mode made the studio much money. According to statistics on Steam Spy from 2017, sales for all franchises were also quite low on the PC platform. These reports, along with others that claim that most developers had been hired as temporary contractors by the company this year, with new hires being inducted just this past month, as well as a cancelled deal with Lionsgate, paint a picture of a perfect storm, a studio at its wits end to try measure up to the same success as their most profitable game series. Like the employees themselves, it seems Telltale was living from paycheck to paycheck.
There is hope for the rest of The Walking Dead Season 2, as talks are ongoing to finance enough money to complete the last two episodes in the series before the studio shuts down for good. Concept art for now-cancelled projects is being leaked out slowly, with 3D models and some storyboards for a Stranger Things game, as well as Batman: The Telltale Series being found on Twitter and Reddit. The 250 employees who just lost their jobs won’t see that money, however. A class action suit will have to be filed to see any of the funds owed to them, and that’s if there’s even enough money in Telltale’s bank account to pay their lawyers.
In the wake of the news, Ubisoft San Francisco organised a meet-up with developers from the studio to discuss job opportunities, and other studios in the gaming industry have sent out messages of support and understanding. Blizzard Studios also voiced their support, and pointed affected developers to their recruiters to discuss job opportunities. A studio buyout or takeover is not likely at this stage – the 25 employees who are left are mostly in a support role to see the end of the last two episodes and to fulfill the company’s legal obligations to shareholders. The company had very few original works, which may be snapped up by other studios if the liquidation process gets to the auction stage.