Massive layoffs hit Too Human and X-Men: Destiny developer Silicon Knights last week, cutting the Canadian developer nearly in half after an unnamed publisher pulled out on a project the team was working on, the company told Kotaku.
That unnamed project is still under development, the developer said.
"Last week Silicon Knights experienced layoffs due to extended contract negotiations falling through with a potential partner," the developer told Kotaku. "We are currently in discussions with other potential partners. The recent Ontario government funding is tied to future performance targets, spread out over the next 5 years, which we will meet."
Silicon Knights declined to say who the partner was, but said it wasn't Activision, who they worked with on their last game.
Earlier this week, 1Up wrote that 75 people had been let go from the company. Silicon Knights tells Kotaku that they laid off 43 employees, or just under half of its work force.
Silicon Knights has received about $8 million in government funding. Some of that money was used to build the company's staff up to nearly 100 people. The developer says they are already refocusing their energy on returning to their roots.
"The company is currently refocusing and returning to its roots, working on one of its most requested titles for the next generation," the spokesperson said.
Silicon Knights, is perhaps best known for 2002's Eternal Darkness: Sanity's Requiem. In 2008 the developer released Too Human for the Xbox 360 to a mediocre reception. Its last game, X-Men: Destiny, which hit earlier this year, was poorly received.
As recently as early last year, the company had been talking privately about continuing their work on a sequel to Too Human, a game meant to kick off a trilogy.
[Thanks for the heads up Daniel]