Reports have been circulating since late last year that Lair developer Factor 5 was in trouble after the abrupt implosion of Brash Entertainment. Today, the extent of the San Rafael, California-based studio's economic troubles was revealed. CEO Achim Moller confirmed on the company's German Web site that Factor 5's US arm has officially closed.
"We are sorry to announce the closure of the San Rafael-based Factor 5, Inc. studio, but the obstacles created by the sudden bankruptcy of Brash Entertainment for the continuation of operations have turned out too great to overcome in the current economic climate," wrote Moller in succinct statement.
President and cofounder Julian Eggebrecht established the Californian studio of the German developer after the release of Star Wars: Rebel Assault II for the original PlayStation in 1997. The shop was behind the popular Rogue Squadron series for the Nintendo 64 and GameCube consoles, and was considered a second-party Nintendo studio until 2004. In 2005, it began developing exclusively for the PlayStation 3, but it went multiplatform last year as part of its deal with the late Brash.
Despite its San Rafael-based arm's closure, Moller noted that the company's German branch remains in operation and will announce new projects in the coming months.
"Factor 5 GmbH, which has been creating games since 1988 with its headquarters in Cologne, Germany, is entirely unrelated to Factor 5, Inc. and the circumstances surrounding Factor 5 Inc.'s recent challenges," Moller continued. "Although we are saddened by Factor 5 Inc.'s situation, our corporation will remain unaffected by these developments and has partnered with both old and new friends in the industry who will reveal our upcoming projects over the next months."
In December, a former Factor 5 animator detailed the gravity of the company's precarious financial position on his personal blog. The developer said that after returning from an extended leave of absence, he found that employees had not been paid for weeks, thanks to publishing partner Brash Entertainment's bankruptcy. Later that month, reports surfaced that roughly half of the studio's staff had been laid off.