The fate of over 50 Nonstop Games employees hangs in the balance, after the Singapore-based games developer was shut down by its parent company, King.
King, the developer behind mobile mega-hit Candy Crush Saga, bought Nonstop Games in 2014 in a highly-publicised deal worth up to US$100 million (S$140 million).
This comprised an upfront payment of US$6 million, and US$10 million paid to a group of employee-shareholders to stay with the company for a year. Over the next four years, a further US$16 million was to be paid out annually to retain select Nonstop Games employees. The remainder was to be paid out if Nonstop hit certain revenue targets.
However, in a statement earlier this week, King said: "After careful consideration, we have taken the difficult decision to close our Singapore studio. We have a fantastic team and world-class talent in the studio and will be working hard to ensure as many people as possible stay within King."
It added: "For those leaving the company, we are committed to ensuring the best possible transition and assistance."
King and Nonstop Games declined to comment in response to additional queries.
When The Straits Times visited the Nonstop Games office at Aperia Mall in Kallang yesterday, it seemed to be business as usual.
The lights at the reception area were still on and there was a steady stream of employees walking in and out of the glass front doors.
One employee told The Straits Times that the studio was "in the process" of closing down, although she was unable to say how long it would take. She added that employees heard about the closure only "in the last few days", and that a number of them were surprised.
Nonstop Games was founded in 2011 by chief technology officer Teemu Ikonen, lead programmer Henrik Karlstrom, chief executive officer Juha Paananen and president Henric Suuronen.
In 2014, The Straits Times reported that one of the reasons King bought the company was that it wanted to expand its portfolio beyond casual games.
Nonstop Games' flagship title was Heroes Of Honor, a free-to-play real-time strategy and city management game that targeted more serious gamers.
However, in February this year, King was acquired for US$5.9 billion by American gaming and entertainment company Activision Blizzard, which already has "hardcore" game studios such as Call Of Duty developer Treyarch in its stable.
The closure of Nonstop Games follows an announcement earlier this year that video game developer Ubisoft would be shutting down the Singapore-made Tom Clancy's Ghost Recon Phantoms online game in December.
Despite the closures, Mr Joe McGinn, department chair of games software design and production at the DigiPen Institute of Technology Singapore, thinks that the outlook for gaming companies here is still strong.
However, he said companies that rely on a free-to-play model with in-app purchases, such as Heroes Of Honor, can find it difficult to turn a profit.
"You can have a million users and still be a failure, because only a small percentage will choose to spend money," he added.
"This can make it very difficult to run a profitable studio, even if it is making a good product that people enjoy."
