Okay, the net is exploding in the last few hours with rumors flying left, right and center. Essentially it all started with the Korean website TheGames.co.kr posting rumors about the end of Flagship Studios, that they had sold off Mythos and Hellgate London and were closing down.

Both Hellgate Guru and Joystiq are posting confirmations of layoffs at Flagship Studios, although we are clearly unsure about the ramifications at this point. Many are pointing to the first confirmation, given to Gamasutra, that Flagship may be flying at half-mast. While the dust flies, we'll keep our eyes and ears open and let you know as soon as we find out what's really going on.

UPDATE: omgRPG attempted to contact Flagship for confirmation on the layoffs, but received no comment. I guess we'll have to work on what other sites have heard.

* Reportedly HanbitSoft, distributor of Flagships' games in Asia, has purchased the IP for Mythos, and some are saying they have also taken control of HG:L. At the same time, emails are landing at various websites purporting that rumors of the power play are nothing but hype.

The latest after the jump.

UPDATE 2: It appears as if Hanbitsoft and Comerica are calling in their markers on the flailing Flagship Studios. In an email to Hellgate Guru, Hanbitsoft affirmed this:

We are U.S. attorneys for HanbitSoft. Your story is a repeat of a quote that is not accurate and we request that you pull it down. At the request of Flagship's attorney, we must correct the record:

Please understand that the facts are (1) HanbitSoft is an exclusive licensee of both Hellgate and Mythos in Asia, with rights to sublicense the games; (2) in addition, HanbitSoft is a secured creditor who has been pledged the Mythos (but not the Hellgate) intellectual property as collateral for a loan; (3) Comerica, another secured lender, has been pledged the Hellgate intellectual property as its collateral for a loan; (4) Flagship Studios does not currently own the intellectual properties to either game, which are held in separate companies subject to the security interests of lenders, and Flagship Studios interest in those companies is also pledged to its lenders; (5) it is unfortunate that Flagship turned down additional investments HanbitSoft offered to make that would have allowed it to keep its doors open, but HanbitSoft hopes to work with Comerica and some of the team at Flagship to see if there is a way to continue to generate content to keep Hellgate online in Asia and to finish the development of Mythos.

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ImpAtom

Ouch. I knew Hellgate London was met with pretty heavy dissatisfaction, at least among the gamers I knew who played it, but I wasn't aware they were doing that bad.

diablo2lod

im not surprised.... the game was a HUGE letdown... too repetitive... and ran for shit on my laptop... even on low settings...

mavlock

The sad part of this for me is after watching my behind the scenes DVD and seeing how these guys started out. Going from a leap of faith in someone house to a full office setup then to this. Perhaps it is truly better to stay small time to cut down on your over head.

Lynxara

I bought and played Hellgate enough to not be surprised. That game was dead in the water at launch, too much didn't work and just felt lame. Once Diablo 3 is out, I bet nobody plays it again.

I am incredibly amused to see this total shitstorm hit after the Games for Windows I attended a few weeks back in San Francisco, where Microsoft was bragging about Hellgate being a huge success story because it had one million subscribers.

I mean... oh god. This timing is amazing. I can't stop laughing. Were our lives works of fiction (which they might be for all I know), I would criticize something like this as too obviously serendipitous, and yet it happened.

ViciousSid

BTW, this story is true. Flagship Studios closed down yesterday/today, and all the staff is currently moving out. Everyone is leaving, and it also sounds like Flagship's creditors (Hanbitsoft, Comerica bank) will assume control of Hellgate London and the not-yet-released Mythos. Bad news all around, but there's a bright spot: apparently several of the company founders dugg into their own pockets to make sure all of layoff victims received 30 day's severance pay.

Still, a hugely disappointing outcome for a once-promising studio. Speaking as a huge Diablo II fan myself, Hellgate was a *god-awful* game. I was especially appalled that Flagship charged $250 for special Collector's Editions of Hellgate (key perk: "lifetime subscription," lol)....and a lot of people wasted their money.

This outcome was inevitable, because Hellgate stank. Life lesson here, folks: don't hype the Second Coming and then release shite!

Check out Voodoo Extreme for more details.

Lynxara

Yeah, I'm a little surprised we haven't seen the follow-up post yet to confirm the studio being dead. Then again, it's the weekend, and these games don't play themselves.

I feel bad for the Flagship guys, but Hellgate just wasn't ready for prime-time when they launched it. Tons of features I saw at pre-release demos were missing at the retail version. There's a parallel universe where Hellgate was released as a finished game, and maybe there Blizzard never had the temerity to announce Diablo III at all over it.

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