Sources tell Kotaku that British game company Kuju Entertainment has shuttered Chemistry, its Sheffield, UK studio. Chemistry was founded in 2002 as "Kuju Sheffield".
Kuju operates five UK-based studios: Headstrong Games (House of the Dead: Overkill for SEGA), NiK NaK (games for kids), doublesix (Burn Zombie Burn), Kuju Manila (Wii mini-games), Zoe Mode (CRUSH for SEGA) and Chemistry (Unreal Engine games). If this rumor is true, however, Kuju now operates four.
According to Chemistry's website, "Chemistry is a game development studio building on the foundations of decades of experience and now making amazing products on the next-gen toolset, Unreal Engine 3.... The studio operates within Kuju's stated strategy of making its studios more autonomous to support greater creativity, to allow greater focus in each studio and to enable faster growth across the group."
Back in January, Kuju began reducing the company headcount — though, only a "small number" at Chemistry seemed to be at risk. The last game we heard Chemistry was working on was a World War I first-person-shooter called To End All Wars. The game was slated for late 2008, but was not released.
We have contacted Kuju for a comment regarding this story.