The co-developer of the now infamous Aliens Colonial Marines, TimeGate Studios, has filed for Chapter 11 bankruptcy, reports a post on Polygon. The news comes about two months after the studio had seriously downsized its staff, sending up the first signals that trouble was brewing at the developer.
While it would be irresponsible to pin the blame for TimeGate’s recent troubles solely on the poor reception and backlash of ACM following its release earlier this year, it’s also impossible to ignore the timing, especially considering yesterday’s news of a class-action lawsuit being filed against publisher Sega and lead developer Gearbox Software over claims of misleading advertising for the game.
The post points to TimeGate’s bankruptcy filing, which lists fewer than fifty creditors like Unreal Engine-maker Epic Games, online gaming company Agora Games, and DJ2 Entertainment. The filing says that TimeGate owes amounts ranging from $10 to $50 million, though it’s not clear precisely how far into the red the studio had gone prior to the filing.
However, while filing for bankruptcy is generally not fun for anyone involved, an important factor to keep in mind here is that the company can still stay open for business and continue to operate. Filing for Chapter 11 sees the company work with courts to organize the debt and try to continue operations—different than Chapter 7, which sees the dissolution of the company entirely. Interestingly, THQ first filed for Chapter 11, saying that the company would be able to continue after its reorganization and quick-sale to a new buyer. Soon after, though, a judge ordered that the sale was unfair to the many creditors, and THQ was dissolved and sold off piece by piece, with proceeds going to satisfy the company’s debts.
That said, it’s entirely possible that this step is just a precursor to full dissolution a short way down the road. Considering TimeGate’s recent track record, it might be tough for the company to keep going in its current incarnation. In the meantime, we’ll update the blog with any more news should the situation develop further.