Daglow said that financial hardship prompted the suspension of operations at Stormfront, which most recently developed a video game adaptation of The Spiderwick Chronicles. While several publishers expressed interest in two original properties in development at the studio, no deals had been signed. One of the projects was later cancelled due to an undisclosed publisher acquisition.

The studio sought a bridge loan to support operating costs while negotiations with publishers went forward, but the financing never came through. Without an inked publishing deal and mounting costs, Stormfront sent its employees home—a measure to prevent an outright shutdown of the studio.

"The number of days it takes to go from [things being fine] to not being able to pay people is not very many, in that situation." Stormfront founder Don Daglow told GameCyte.

With operations suspended, the company hopes that one of the aforementioned publishing deals will come through in time to salvage its workforce before employees migrate to other studios.

"The publication of the news has triggered some additional discussions," Daglow added. "We have to see if those can move forward. Obviously, the fact that we have suspended development is also a factor in those discussions, and realistically we realize that can affect things. We just have to follow through on this strand and see where it leads."