Krome Studios Confirms Financial Troubles, Future Remains Undecided [Updated]

[Update] We mistakenly listed Krome Studios as the developer of Wii version of Star Wars: The Force Unleashed 2 when, in fact, Krome was the developer of the original Force Unleashed for the Nintendo Wii and PS2. Red Fly Studio is currently developing the Force Unleashed 2 for the Wii. The post has been edited to address this mistake. We apologize for the error.

[Original] Rumors have been swirling that Australian developer Krome Studios was in financial trouble yesterday and today, according to GameSpot Australia, the studio has confirmed some of the rumors are true.

Krome had reportedly shuttered operations at its Adelaide studio and laid off a "significant" portion of its staff at its Melbourne and Brisbane offices.

Krome told GameSpot that the industry is still going through "economic challenges" the studio is not immune from. They have confirmed that an undisclosed number of staff have been put on "notice pending the outcome of a number of upcoming projects." Krome is currently developing Blade Kitten.

Although the road is currently bumpy for the development company, Krome notes the issues have "not affected the development" of current projects, both "announced and unannounced." The statement adds that the developer remains "firmly committed to the future of all three studios," killing reports that its Adelaide studio has already been closed down.

Krome's Adelaide studio remains on a four-week notice period, and its future is set to be decided at the end of this period. Over the past year, Krome has slimmed operations to its three studios. In November 2009 the studio made staff cuts across the board, doing the same again in April 2010.