Layoffs Come to Silicon Knights

Silicon Knights has laid off staff but denies all rumors about Eternal Darkness 2.

It’s been a rough couple of weeks for Silicon Knights, the Canadian studio best known for Blood Omen: Legacy of Kain, Eternal Darkness: Sanity’s Requiem and of course the disappointing Xbox 360-exclusive Too Human. First, its long-standing, multi-million-dollar litigation against Epic Games over problems with the Unreal Engine 3 in Too Human were dismissed almost in their entirety, and then, just a week later, Epic was awarded nearly $4.5 million in its counter-suit against the studio. And now comes a claim that Nintendo has lost its faith in the studio, resulting in the cancellation of Eternal Darkness 2.

That claim, which to be clear is entirely unsubstantiated, came from a NeoGAF user by the name of “Shiggy,” who wrote that once Nintendo realized it would need to sink another $10 million into the game just to keep the lights on at Silicon Knights, it balked. “It looks like there have been internal discussions between Nintendo and Silicon Knights,” Shiggy wrote. “NCL reviewed its decision and it appears as if Eternal Darkness 2 is cancelled for now. Hence, many of the 40-man team were laid off, leaving the studio in limbo now.”

Yet substantiated or not, Silicon Knights boss Denis Dyack issued a statement acknowledging some layoffs but denying the Nintendo part of the equation. “Silicon Knights has unfortunately had to lay off a small number of people. We are scaling back to a core group and focusing all our efforts on future opportunities,” he told GamesIndustry. “As to the rumor about Nintendo, it is not true and has no basis in fact.”

What specifically about the rumor “is not true and has no basis in fact” isn’t entirely clear, however, as Eternal Darkness 2 has never actually been confirmed as being in development. Has it not been canceled? Was it never actually in production in the first place? At this point, nobody knows.

What is known is that Silicon Knights had already cut its headcount by nearly 75 percent in October 2011, leaving it with just 25 full-time employees, although the NeoGAF rumor suggests that new hires had since been made. Regardless of the status of Eternal Darkness 2, however, or whether it had 25 or 40 employees, having to reduce its headcount even furhter looks like very bad news for Silicon Knights.

Source: GamesIndustry