Rumor: Red 5 Studios Goes Down, Hit By Layoffs

Red 5 Studios may never complete its unannounced MMO. The Irvine, California based developer founded by ex-Blizzard staffers, has been hit by substantial layoffs, sources tell Kotaku, leaving it with a "skeleton crew" and an abandoned massively multiplayer online shooter.

According to sources who wished to remain anonymous, Red 5 is now down to about 30 employees. That's down from the 65 profiled on its official web site as part of "The Tribe" and approximately 100 as of December 2008, before the developer had shuttered its Shanghai office.

Red 5 Studios was said by sources to have been nearing closure, but was bailed out by an unnamed buyer last week, with employees let go following the buyout.

One source said that Red 5's massively multiplayer online first-person shooter project, a futuristic military game built on Offset Software's video game engine, has been put on hold following the buyout and layoffs. Red 5's development focus is said to have shifted to another project, one "aimed at the Chinese market."

Red 5's MMOFPS was part of a deal inked with Korean publisher Webzen announced in 2008, financed by $18.5 million in funding. The studio was formed in 2005 by former World of Warcraft developers Mark Kern, William Petras and Taewon Yun.

Calls to Red 5's studio were not answered and requests for comment and clarification were not returned as of press time.