Report: Avalanche Studios to half staff

Just Cause outfit prepares to pink-slip 77 of 160 as two game contracts valued at $34 million fall through; Just Cause 2, The Hunter remain on track.

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If September's sales numbers are any indication, the gaming industry on the whole is weathering the current global economic crisis well enough. However, not everyone within the industry is feasting at the table. Swedish developer Avalanche Studios confirmed today that it will be laying off 77 of the approximately 160 employees at its office in Stockholm, as reported by Game Reactor.

According to the report, Avalanche had two contracts valued at $34 million for unannounced games go bust this year, which necessitated the staff reductions. Game Reactor notes that one of the projects was canceled due to its publisher shifting focus to the more family-friendly market, a move not uncommon for cash-tight game makers such as Majesco. The other project reportedly fell on a rough patch when its publisher ran out of money.

Established in 2003, Avalanche is best known for its 2006 debut Just Cause. The free-roaming, hyperbolic action adventure landed with modest praise and middling sales in the US, selling just shy of 200,000 copies across the Xbox 360, Xbox, PlayStation 2, and PC through September 2008, according to the NPD Group. The staff reductions will reportedly not impede development on Avalanche's two announced projects, Just Cause 2 and The Hunter.

Initially scheduled to arrive this year, the Eidos-published Just Cause 2 is now expected in 2009. For more on the game, check out GameSpot's previous coverage.

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