Take-Two Destroyed an Indie Studio by Cancelling a Contract and Rehiring the Staff for the Same Project

Kerbal Space Program was a massive hit. Developed by Squad and published by Private Division, a branch of Take-Two Interactive. The publisher then hired Star Theory Games to develop the sequel Kerbal Space Program 2 but the studio went under.

The game is still in development but a new article from investigator reporter Jason Schreier has provided insight into how Star Theory Games went under. Revealing that it was Take-Two who canceled the contract and attempted to hire the entire staff to continue the game's development.

Schreier wrote that his sources explained that development for the game was moving along smoothly. However, on December 6th employees from Star Theory received recruitment messages from Michael Cook, the executive producer from Private Division informing them that they were pulling the contract and providing a new employment opportunity for Star Theory's employees.

“This was an incredibly difficult decision for us to make, but it became necessary when we felt business circumstances might compromise the development, execution and integrity of the game,” Michael Cook, an executive producer at Private Division, a publishing label within Take-Two Interactive Software Inc., wrote in the message, which was reviewed by Bloomberg. “To that end, we encourage you to apply for a position with us.”

The new studio called Intercept would be working on Kerbal Space Program 2. Bob Berry and Jonathan Mavor, the founders of Star Theory, called a meeting immediately and attempted to keep their staff together. Despite Take-Two being the only source of revenue for the company they still had money to keep the company afloat. In addition, Schreier explained that Berry and Mavor were in talks with Take-Two to sell the company but the deal fell through as Take-Two was dissatisfied with the terms.

The next 3 months leading up to the company's closure were its last stand. About 12 of the 30 employees took Take-Two's offer and the rest of the team attempted to save the company,. The remaining staff started brainstorming new ideas, prototyping, and hoping to secure a publisher during GDC 2020. Unfortunately, the COVID-19 pandemic happened and all public events were canceled. This was the final nail and Star Theory closed.

This is a truly sad story. At the moment it's unclear why Private Division canceled the contract. If development was proceeding well but after receiving an extension on the deadline to add new content it also kicked off a new round of contract negotiations. This could be the catalyst but it's uncertain.

Adam Siddiqui,
Managing Editor, NoobFeed
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