Damnation studio dismantled - Report

Blue Omega Entertainment's Damnation launched in May for the Xbox 360, PlayStation 3, and PC to critical disdain. Now the alternate-history shooter may wind up as Blue Omega's suitably named epitaph.

According to a Twitter post from Blue Omega programmer Geoff Rowland, "the entire Blue Omega team was laid off," effective last Friday. It was not certain if Rowland was referring to the entire film-and-game production company or simply those employees with a focus on game development. Multiple inquiries to Blue Omega and its representatives went unreturned as of press time.

A pair of lawsuits spotted by Shacknews and confirmed by GameSpot depict a significantly troubled development for Damnation. In January, the company filed a lawsuit against Point of View, a company it subcontracted for work on the game. The complaint states that Point of View violated its contract by seeking payment directly from Damnation publisher Codemasters.

According to the suit, Codemasters "consistently was delinquent in making the payments it owed to Blue Omega," and the direct payments would have enabled development on the game to continue despite the publisher's refusal to pay its debt to Blue Omega. The suit alleges that Codemasters missed almost every payment deadline and that the publisher's liaison to Blue Omega said the tardy financing was happening on a number of its projects.

Point of View wasn't the only subcontractor to run afoul of Blue Omega. The production company also filed suit against Velvetelvis Studios the following month, saying the subcontractor failed to meet milestone deadlines and failed to work "using sound, professional practices and in a competent and professional manner." The suit against Point of View has since been dismissed, while the Velvetelvis dispute has been stagnant since March.

Damnation isn't the only game project on Blue Omega's slate. The company's Web site lists an unannounced "high-octane shooter" for the Xbox 360, PS3, and PC, as well as Attack of the Dust Bunnies, an Apple iPhone game set for release this month.