Telltale Games Closed, but TWD Final Season SAVED!

Telltale Games, creators of episodic adventure games like The Walking Dead, The Wolf Among Us, and Batman: The Enemy Within, laid off a large number of its staff today. The company will retain a small team of 25. According to multiple sources The Verge spoke with, employees were let go with no severance.

“Today Telltale Games made the difficult decision to begin a majority studio closure following a year marked by insurmountable challenges,” the company said in a statement. “A majority of the company’s employees were dismissed earlier this morning.” The remaining employees will stay on “to fulfill the company’s obligations to its board and partners,” according to Telltale.

The final season of Telltale’s award-winning series, The Walking Dead, kicked off last month. The second episode is slated to launch next week. Staff were informed of the layoffs today and were given roughly 30 minutes to leave the building, according to one source.

Telltale had previously announced a second season of The Wolf Among Us and a game based off of Netflix’s wildly popular show Stranger Things. The company has not yet commented on the status of those projects, though the outcome seems dire. On Twitter, one former lead writer wrote, “I’m so sad we won’t be able to show you all Wolf.”

The layoffs come a few months after revelations that Telltale was a studio mired in toxic management that included employees being subjected to constant overwork. Once an industry darling that worked on iconic brands like Game of Thrones and Minecraft, Telltale quickly spiraled. In June, co-founder and former CEO Kevin Bruner sued the company seeking recovery of financial damages. Telltale described the suit as “meritless” and “an apparent means of extracting revenge on a company already under financial strain.”

In a post on his personal site today titled “Telltale closure,” Bruner wrote that he is “saddened for the people who are losing their jobs at a studio they love. And I’m also saddened at the loss of a studio that green-lit crazy ideas that no one else would consider.”

This isn’t the first time Telltale has been subject to layoffs; last November the company laid off 90 employees, which was approximately 25 percent of its workforce. “The realities of the environment we face moving forward demand we evolve, as well, reorienting our organization with a focus on delivering fewer, better games with a smaller team,” CEO Pete Hawley said at the time.

“It’s been an incredibly difficult year for Telltale as we worked to set the company on a new course,” Hawley said today. “Unfortunately, we ran out of time trying to get there. We released some of our best content this year and received a tremendous amount of positive feedback, but ultimately, that did not translate to sales. With a heavy heart, we watch our friends leave today to spread our brand of storytelling across the games industry.”

Update September 21st 5:40PM ET: This article has been updated with Telltale’s statement about the layoffs.

The final episodes for Telltale Games “The Walking Dead: The Final Season” will be released afterall, with Skybound taking over development and publishing of the game, “Walking Dead” creator and Skybound founder Robert Kirkman announced Saturday. Skybound also hopes to keep the original Telltale development team intact so they can be the ones to finish the season.

Skybound Games will work with members of the original Telltale team to finish the story, though nothing has yet been finalized, a spokesperson told Variety. Skybound never used in-house developers on its games before.

“We’ve successfully negotiated with Telltale Games for our company Skybound to come in and see Season 4 of the Telltale game to completion,” Kirkman told an audience at New York Comic-Con Saturday night. “We can’t lose Andrew Lincoln and Clementine in the same year.”

Telltale Games’ sudden catastrophic laying off of nearly all of its 274 employees with no notice, no severance, and barely a week’s worth of health care last month came just a day after two potential investors walked away from potential funding talks.

Both AMC and Smilegate were in discussions to invest in Telltale Games, a deal that management had been working on to essentially save the company, sources told Variety at the time.

Days after the original layoffs hit, a former employee filed a lawsuit on behalf of all of those let go, saying that Telltale Games violated state and federal labor laws with the mass layoff because it didn’t give proper notice.

After the layoff, the company said it was keeping on about two dozen employees to finish the port of Telltale’s “Minecraft” game for Netflix. Just last week, though, another group of those remaining members were let go.

Telltale CEO Pete Hawley told Variety on Thursday that the studio was still going through a lot and that he planned to make another statement in the next few days. That same day, Robert Kirkman announced during a New York Comic-Con talk about “The Walking Dead” that fans of the game should “stay tuned. Everyone involved is trying to make sure Clementine’s story is told.”

Skybound Entertainment was created by Kirkman in 2010 to develop properties both in traditional and new media including television, film, video games, and digital media. Earlier this year, Skybound created Skybound Games to help develop its IP into video games.

Skybound created the Telltale deal to turn the comic book version of “The Walking Dead” into a piece of interactive fiction. They’ve also teamed with Scopley to create the smartphone game “The Walking Dead: Road to Survival,” with Starbreeze on shooter “Overkill’s The Walking Dead,” and with Skydance Interactive on virtual reality game “The Walking Dead: Saints and Sinners.” The company also backed Free Range Games’ “Labyrinth” and Oxenfree’s “Night School Studios.”

AMC’s “The Walking Dead,” which has spurred a few games including successful mobile titles, are not connected to the Skybound games, which are based strictly on the comic book, not the television show.