Game studio owner suddenly lays everyone off and blames a Kotaku report that hasn't been published

It's despairingly common to hear about game studios closing lately, but I don't think I've ever heard a studio owner blame their company's closure on leaked information that has yet to be made public. That's what happened today when every employee at Possibility Space, a relatively young studio whose first game hadn't yet been revealed, was suddenly laid off.

Employees received news of Possibility Space's closure "in a nice surprise morning email" today, according to a former senior environment artist at the studio. 

That email was acquired by Polygon reporter Nicole Carpenter. In the memo, Possibility Space owner Jeff Strain, who previously co-founded ArenaNet and Undead Labs, tells the studio's staff that he was recently contacted by Kotaku reporter Ethan Gach with questions about the closure of Crop Circle Games, another studio he owned with wife Annie Delisi Strain under their company Prytania Media.

Gach's questions included "non-public information" about Possibility Space's first game, Jeff Strain said in the e-mail, as well as confidential Prytania Media business information, including the identity of its publishing partner. Jeff was shocked, he said, to learn that the information had come from current employees. He claimed that after disclosing the leak to their publishing partner, the company "expressed low confidence they would be willing to invest the additional resources needed to complete the game." Jeff and the unnamed publishing partner then "mutually agreed to cancel" the project.

The letter goes on to announce that Possibility Space is closing immediately, and concludes with the note that Jeff is "stepping away from the game industry" to focus on his family and care for his wife, who recently disclosed a serious medical diagnosis.

Annie Delisi Strain disclosed that diagnosis last week in an open letter (archived here) about the closure of Crop Circle Games. That letter also references Gach's forthcoming Kotaku article. Annie expressed concern that Gach's reporting might reveal details about her medical record, and said that Crop Circle's closure was due to "a permanent and sustained alteration and contraction" of the games industry and lack of investor interest in Crop Circle's game, which she called "fundamentally out of touch with emerging player tastes."

Crop Circle's former studio director Jess Brunelle contradicted that justification in a post on LinkedIn following the closure. "This is a very reductive statement, I believe it shifts blame to everyone and everything other than the people at the top," she wrote. "Saying our game was 'not commercially viable' makes the team sound like we didn't know what we were doing, which I can assure you is not the case. There is no evidence to back up this claim and we will never know if it was a commercially viable product."

In a brief response to the letter, Gach said that he had not planned to disclose Annie's medical diagnosis. "I don't know how she came to that conclusion and I'm sorry she did," he wrote.

Gach has yet to publish his report on the shuttering of Crop Circle, but ex-employees have publicly expressed discontent over how the studio's closure went down. According to a LinkedIn post from an former employee, they were let go without severance, and another characterized the studio's end as messy and disrespectful. 

In the wake of the studio closures, the Strains have been accused of hypocrisy for previous statements expressing solidarity with workers and criticizing poor employee treatment from big developers. Austin Walker, formerly IP director at Possibility Space, reshared a screenshot of a social media post from Annie Strain in which she blamed games industry layoffs on "bad management and bad decision making." And Jeff Strain notably called for game workers to unionize in a 2021 open letter.

It's not especially uncommon for workers to speak to reporters anonymously about their workplaces, and I can't recall ever hearing of an investor immediately backing out of a multi-year project because of unpublished leaks about a studio's game and finances. The letter from Jeff Strain today doesn't state explicitly that leaks are the reason he and the publisher chose to cancel the game, but it offers no other reasons.

We don't know how far along the game was, but the studio was a few years old. Possibility Space was founded in 2021 with a team of industry notables including former Campo Santo and Valve artist Jane Ng, former Ubisoft and Insomniac designer Liz England, and Richard Foge, whose credits include the original God of War, Guild Wars 2, and State of Decay.

Besides the now-closed Possibility Space and Crop Circle Games, Jeff and Annie's Prytania Media owns two other game developers: Fang and Claw, "a people-first studio making a player-centric AAA game," and Dawon, a "mobile‑first videogame studio" based in Bengaluru, India. It's presently unclear what Jeff Strain's statement that he's "stepping away" from the industry means for those studios.

The Prytania Media website has been taken down, as have the official Possibility Space and Crop Circle Games websites.

We've asked Prytania Media for comment, and I've also contacted Kotaku publisher G/O Media.