Prototype Developer Radical Cut In Half

Radical Entertainment, developer of Prototype and The Incredible Hulk: Ultimate Destruction, has been hit with substantial layoffs today, according to development sources close to the Vancouver-based studio. Approximately 90-plus employees have been let go, sources say.

That's about half the studio's headcount, apparently, affecting two of the three development teams at the Activision Blizzard owned developer. Radical's most recent game, the open world action game Prototype for the Xbox 360, PlayStation 3 and PC, was met with a positive critical response and solid initial sales.

Activision had previously "realigned" the studio after its merger with Vivendi Games.

One source said that Radical was affected by Disney's recent purchase of Marvel, leading to the loss of an unnamed project. Parent company Activision's most recently published Marvel-licensed games include Marvel Ultimate Alliance 2, Spider-Man: Web of Shadows and X-Men Origins: Wolverine.

The publisher did not list a Prototype sequel on its 2010 slate when Activision announced annual earnings of $4.28 billion, leading to the "most profitable year in our company's history and record operating margin," according to CEO Bobby Kotick.

We've reached out to Activision reps for comment, but have not yet hard back. We'll update if we do.

Update: When contacted, Activision provided the following statement.

"Activision Publishing continually evaluates its resources to ensure that they are properly matched against its product slate and strategic goals. In 2010, the company's sku count will be smaller than in 2009 driven in part, by a decrease in the number of music-based games we will be releasing."

"As we discussed on our earnings conference call yesterday, we are directing our resources against the largest and most profitable business segments, and as part of this initiative, we are realigning our resources to better reflect our slate and the market opportunities. At the same time, we are increasing our digital/online capabilities as we expect that digital/online will continue to become a more meaningful part of our business model in the years ahead."