Report: Flagship Studio Closes, Loses All IP

By Chris Faylor, Jul 12, 2008 11:48am PDT Update: Flagship community manager Taylor Balbi has denied Voodoo Extreme's report that he confirmed the studio's closure.

"I didn't say this at all, and I have never spoken to [Andrew Burnes at Voodoo Extreme] or recall ever speaking to [Andrew Burnes at Voodoo Extreme] about anything ever," Balbi wrote on the company's forums. "I'm sorry, but this news article is just not from me."

Meanwhile, multiple Flagship staff members--including Guy Somberg, Patrick Harris, Amol Deshpande, Chris Schillinger, Jesse Jones and Ray Li--have updated their LinkedIn accounts to show they are no longer with the company.

In curious related news, Hellgate: London subscribers have been unable to cancel their subscriptions for the past day, according to Flaggshipped.

Original Story: Following up on word of significant layoffs at Hellgate: London (PC) developer Flagship Studios, multiple reports are now circulating that the studio has shut down and all employees have been let go.

Left, Hellgate: London. Right, Mythos.

A Kotaku report on the studo's closure cites an anonymous source, while Voodoo Extreme sources Flagship community manager Taylor Balbi. Balbi apparently claimed that three of the studio's executives used their personal funds to provide employees with 30 days of pay.

Formed by the ex-Blizzard North staff responsible for the acclaimed Diablo series, Flagship released its first title, the action-RPG Hellgate: London, last fall. Another action-RPG, Mythos, was still under development.

The closure also applies to ping0, an online publishing and hosting company created by Flagship and Korean publisher HanbitSoft.

With its doors shut, Flagship has relinquished its rights to the Hellgate: London and Mythos action-RPG franchises. HanbitSoft now owns the Mythos intellectual property, while Comerica Bank gets Hellgate: London per a past loan agreement.

"It is unfortunate that Flagship turned down additional investments HanbitSoft offered to make that would have allowed it to keep its doors open," a HanbitSoft lawyer told Hellgate Guru.

"HanbitSoft hopes to work with Comerica and some of the team at Flagship to see if there is a way to continue to generate content to keep Hellgate online in Asia and to finish the development of Mythos."

While the situation isn't looking too good for Flagship and its former employees, an anonymous tipster informed Kotaku of "hope that they will all have their jobs back at the end of next week at a brand new company."

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  • This doesn't bode well for Mythos, I don't see how another company will be able to pickup development on it and create a competitive product.

    My gut prediction - this is a technical closure to consolidate debt and in reality a new leaner company will form (from Hellgate Employees) that operates on CONTRACT(which was probably part of this closure deal and handing off of the ip) with HanbitSoft. This new company will continue to develop Mythos and support Hellgate (probably bug fixes and minimal content updates.)

    I expect a press release that puts a positive spin on the situation in the upcoming months. Something to the effect of "We are pleased to work with HanbitSoft a leader in online gaming in Asia. This relationship is going to give us the financial freedom to grow Mythos into the product we want to make. blah blah."