7 Studios, the Los Angeles developer and pinch-hitter for the Guitar Hero division, has been shut down according to Joystiq. Various staff members tweeted that the studio closed last night. One unnamed source claimed that half of the staff had been let go with 60 days severance pay, while the other half will remain employees for the next 120 days to resolve a legal dispute with the creators of Scratch: The Ultimate DJ.
Vicarious Visions, a New York studio that had been developing the next Guitar Hero, has also been hit with layoffs according to Develop. While an unnamed source claims that the studio is not closing completely, it has reportedly lost about fifty developers composing a quarter of the total staff.
"We're actively working with Activision on various options going forward for the studio. No decisions have been taken at this stage. We appreciate everyone's support through this process and will be as open and transparent as possible as soon as we know more."
We reported this morning that downloadable content for both Guitar Hero and DJ Hero will continue through February, then end. Whatever FreeStyle staff remains after the cuts will probably be reorganized into other studios.
The 7 Studios closure is interesting in the context of the legal battle between Activision and the current developers of "Scratch: The Ultimate DJ", Genius Products (software) and Numark (scratch controller).
Activision acquired 7 Studios back in April 2009, when they were developing Scratch: The Ultimate DJ under contract from Genius. That touched off the lawsuit: http://www.shacknews.com/onearticle.x/58158
Prior to undertaking these wrongful actions, Activision approached Genius with an offer to acquire Scratch. The offer was rejected. It is alleged that Activision then commenced the process of acquiring Genius' contract developer, 7 Studios, while under a non-disclosure and confidentiality agreement with Genius. It is also alleged that after Activision acquired 7 Studios, the two companies began conspiring to prevent Scratch from getting to market on a timely basis by withholding work product, code and the proprietary game controller.
And then this happened: http://www.shacknews.com/onearticle.x/58245
On Wednesday, April 15, 2009, as requested by Scratch DJ Game LLC, the Court ordered 7 Studios, which was recently acquired by Activision, to turn over to Scratch DJ Game LLC within five days all source code related to Scratch - The Ultimate DJ game, including 7 Studio's pre-existing developer software tools and technology that went into developing the game. Despite arguments from Activision's counsel, the Court clearly concluded that the source code was the property of Scratch DJ Game LLC. The Court also granted an injunction preventing 7 Studios from disclosing or discussing the game code or Scratch trade secrets with Activision or any other third party.
So now that Activision's not making music games, and 7 Studios was closed, I'm curious where this stands. The game "Scratch: The Ultimate DJ" still hasn't been released.