E3 2008: Flagship still afloat

During the run-up to the E3 Media & Business Summit, reports proliferated online stating that Flagship Studios, the development house behind PC online action game Hellgate: London, had laid off its entire staff, lost its intellectual property rights, and shut down operations.

According to a statement released by the studio today, reports of its demise have been exaggerated, although perhaps not so greatly. The company acknowledged that it had laid off "most employees," but emphasized that the core management team, including CEO and cofounder Bill Roper, remains at the helm.

"The past five years have been an incredible experience for us," Roper said, "but unfortunately, we couldn't sustain the size of the company any longer."

The San Francisco-based Flagship was formed in 2003 by employees from Blizzard North, the development house behind the hugely successful Diablo series. After appearing at three straight E3s, Flagship's first project, Hellgate: London, made it to retail stores on October 31, 2007. While the game has sold more than 200,000 copies in the US according to NPD Group figures, the initial release was riddled with bugs, a frustration that likely cost the title some early-adopter subscribers.

Flagship is no longer accepting new subscribers for Hellgate, and current subscribers won't be billed any longer. As for its technology and the intellectual properties of Hellgate and the still-in-development Mythos, Flagship still owns all of the associated rights.